“Red flag” raised on Udenna’s Malampaya buying spree

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Sen. Sherwin Gatchalian once again sounded the alarm on Udenna Corporation’s purchases related to the Malampaya gas-to-power project, this time raising a “red flag” on the Dennis Uy-led firm’s financial capability to purchase the 45% share of Shell Philippines Exploration B.V.

Gatchalian, chairman of the Senate Committee on Energy, aired his concern following the suspension of the casino project of another Udenna unit Ph Resort Group Holdings, Inc. reportedly due to financial problems.

“Paano natin mapagkatitiwalaan ang kumpanyang lubog sa utang?,” Gatchalian said in a statement.

“Malampaya is no ordinary asset. We have to make sure that any transaction should go through a thorough review and due diligence by the government to assure the Filipino people that whoever is going to step in is highly qualified, competent, and can deliver electricity”, he added.

Malampaya, the country’s only major source of indigenous natural gas supplies around 26% of Luzon’s power needs.

Ph Resort Group Holdings voluntarily suspended its casino project in Clark, Pampanga, which has Php7.2 billion in net liabilities as of June.

The Department of Energy (DOE) is still reviewing the Shell-Udenna deal, which took place in May. Nonetheless, Gatchalian had warned the agency earlier this month that it may face legal action if it approves the transaction, which he called a “midnight deal.

Even with the DOE’s approval, the Senate still questioned Udenna’s prior acquisition of the other 45% of Malampaya, which it acquired from Chevron in March 2020, on grounds that the Uy-led firm had a “negative working capital.”

Energy Usec. Felix William Fuentebella, however, downplayed the lawmaker’s concerns in a BusinessWorld report, saying that the casino issue was of no concern to the DOE because it was under a different consortium.

Uy was a major contributor to the campaign of then Davao City Mayor Rodrigo Duterte in the 2016 presidential elections.