Politics

Tycoon close to outgoing Philippine president mulls sales of big assets — sources

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A tycoon and close associate of outgoing President Rodrigo R. Duterte is considering selling businesses collectively worth several billion dollars, including a South China Sea gas field and a commercial land lease firm at the site of a former US military base, two sources familiar with the matter said on Thursday. 

Dennis A. Uy, chairman of conglomerate Udenna Corp. and listed Chelsea Logistics, has seen rapid growth and diversification of his business empire during the six-year presidency of Mr. Duterte, who leaves office next month. 

The assets he is considering selling are the Malampaya gas field, which Mr. Uy had acquired from Chevron and Shell for approximately $1 billion, and Clark Global City, which also cost $1 billion, the sources told Reuters, declining to be identified as they were not authorized to speak to media. 

They said buyers had been looking at prospects for some of Mr. Uy’s other businesses, including oil retailer Phoenix Petroleum and his new telecom firm DITO, plus schools and food businesses he operates. 

It was not immediately clear why Mr. Uy, the top campaign contributor of Mr. Duterte in his 2016 presidential run, was putting the assets up for sale. His representatives did not immediately respond to requests for comment. 

Mr. Uy, 48, is one of the Philippines’ leading entrepreneurs, whose appetite for risk and acquisitions saw him build the bulk of his empire in just a few years. 

Udenna Corp. nearly quadrupled its portfolio to more than 100 firms in the first four years of the Duterte presidency, in sectors from gaming, shipping, education and construction to fast food, ferries, tourism, telecoms and sports cars. 

The company has long insisted it received no preferential treatment under Mr. Duterte and all businesses and contracts were acquired fairly. 

Mr. Duterte will make way for Ferdinand “Bongbong” R. Marcos, Jr., the son of the notorious dictator, who won a presidential election by a landslide on Monday. 

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Included in the preferred bidders for deals for Malampaya and Clark Gateway — the developer and landlord of a 177-hectare (437.4-acre) business district near Clark international airport — is billionaire Enrique K. Razon, Jr., one of the sources said. 

The transactions have been in the works for “some months already,” the source said, adding “an announcement looks imminent.” 

Mr. Razon, Philippines’ third richest man with a net worth of $5.8 billion based on a Forbes ranking, did not immediately respond to a request for comment. 

His Bloomberry Resorts announced on Wednesday it had signed a deal to invest in Mr. Uy’s integrated casino-resort projects in Clark and the central province of Cebu. 

The Malampaya gas field fuels power plants that deliver about a fifth of the Philippines’ electricity requirements. In December Mr. Uy’s Udenna said Malampaya may operate for several more years beyond its projected 2027 project life. 

The proposed assets sales come after the pandemic decimated the profitability of many of Uy’s businesses. 

Udenna’s total liabilities rose by nearly half to P254 billion ($4.85 billion) in 2020 from P171 billion in 2019, latest available data from the corporate regulator showed. — Reuters