Duterte crony Dennis Uy is currently negotiating with China Banking Corp. (CBC) of the Sy and Dee families for a fourth extension to settle his PH Resorts Group Holdings P5.962 billion maturing loan.
In its latest financial report, PHR revealed that a “further extension (of the loan) is in process” after CBC’s most recent deadline to collect on its maturing loans which lapsed on September 14. CBC had previously reduced the interest on its loans from 9.55 percent to eight percent for peso loans and 6.25 percent to five percent for the dollar loan.
PHR sought debt relief from CBC in the middle of the pandemic-ravaged 2020 as it had no cash to pay the loans it obtained in 2017 and 2018 to bankroll the construction of its Emerald Bay casino resort hotel in Mactan, Cebu (opening has been delayed from 2021 to 2023).
Although CBC declared the loans current or collectible within a year, it granted PHR the first extension up to 18 December 2020 (PHR availed of the debt moratorium for COVID-distressed companies under the two Bayanihan Acts). CBC later extended the deadline twice to June and September 2021.
Aside from CBC, PHR also has a P975 million long-term loan to United Coconut Planters Bank which Uy deployed to refinance his purchase of Donatela Resort in Bohol (this was temporarily closed last October). UCPB agreed to test PHR’s compliance to its debt service coverage and debt-equity ratios starting December 31 this year.
PHR’s auditor SGV & Co. reiterated its previous opinion that the company is facing a “material uncertainty that may cast significant
doubt on the company’s ability to continue as a going concern and therefore, the group may not be able to realize its assets and discharge its liabilities in the normal course of business.” SGV pointed out that PHR’s current liabilities already exceeded its current assets by P7.44 billion as of September 30, 2021.
But PHR assured that it was negotiating with CBC to convert its bridge loan to a long-term project loan; looking for additional long term loans; seeking to defer principal and interest payments and testing of its Donatela Resort’s debt to equity ratio.
PHR is also looking for other options to raise funds from the capital market after raising P765 million from a follow on offering in November 2020 and P599 million from a top-up placement in August 2021. PHR had shelved its Clark casino project to focus its dwindling resources on finishing phase one of Emerald Bay.
“Management believes that considering the progress of the steps undertaken to date, these financing and capital raising plans are
feasible and will generate sufficient cash flows to enable the group to meet its obligations when they fall due and address the group’s liquidity requirements to support its operations and the completion of its projects,” said PHR.