Senator Sherwin Gatchalian is urging Energy Secretary Raphael M. Lotilla to look into the impact of a looming foreclosure by a group of banks led by BDO Unibank on the assets of Udenna Corp., the debt-burdened holding firm of Davao crony Dennis Uy.
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Gatchalian said the foreclosure notice issued by BDO to Udenna on June 22 “could have detrimental consequences on the state of the country’s energy security” considering that Udenna’s subsidiary, UC Malampaya, has a 45 percent stake in the Malampaya gas field.
Udenna bought Chevron’s 45 percent for $565 million in 2020 and it was cleared by the Department of Energy in 2021. Udenna’s purchase of Shell Philippines Exploration’s 45 percent stake in Malampaya has yet to be approved by the DOE.
In a statement, Gatchalian said: “If banks decide to foreclose on Uy’s assets and become the new owners, banks will not have the technical capability to manage Malampaya. This will also preclude any further exploration for oil and gas in the service contract.”
“The DOE should immediately review its financial capacity to continue its obligations under its participating interest and prepare for the worst-case scenario if in case the banks foreclose the troubled company’s share in the lone significant source of gas supply in the country,” he said.
Udenna has disputed BDO’s claim that its subsidiary, Global Gateway Development Corp. (GGDC), has defaulted on its loans used in the development of the 177-hectare property in the Clark Freeport Zone. Uy took over GDC in 2017 and borrowed P50.2 billion the same year for its capital expenses.
“We replied to the consortium banks to dispute their conclusion and clarified that, under the circumstances, there has been in fact, no event of default or, at the very least, no irremediable event of default, under the master lease agreement on the part of CGCC (Clark Global City Corp.) or GGDC,” said Udenna in a statement on July 23.
Malampaya, which opened in 2001, supplies 40 percent of Luzon’s annual energy requirements. It is set to be decommissioned between 2027 and 2029 unless new investments are made to develop other energy reserves in the area.
Last June, ultra bilyonaryo Ricky Razon revealed that his Prime Infra has started negotiations to buy out Uy’s controlling stake in Malampaya.
“We have repeatedly red-flagged in the past the entry of Udenna Corp. In the operations of Malampaya due to reports of debt, cash problems, and technical incompetence,” said Gacthalian.
“I am hopeful that the new leadership of the DOE will swiftly act to address the uncertainty caused by this foreclosure and ensure the country’s energy security,” he added.