Dennis Uy’s embattled resort seeks fresh funding

MANILA, Philippines — PH Resorts Group Holdings Inc., the listed gaming and hospitality company of Davao-based businessman Dennis Uy, is seeking to increase its authorized capital stock by P7 billion to give it more leeway to issue new shares and raise fresh capital.

This is part of the company’s agenda set for shareholders’ approval during its annual stockholders meeting scheduled on Wednesday, July 26.

It will also seek the approval of issuance of shares for an equity offering, private placement, top-up placement or similar transaction to be determined by its board of directors.

PH Resorts also wanted to sell some of its assets, but the Securities and Exchange Commission (SEC) denied the company’s request to include the asset sale in the agenda of its upcoming stockholders meeting.

The SEC said the asset sale was not part of the agenda the company submitted last May.

The firm, which is part of Uy’s Udenna Group, is raising against time to fix its finances after last year’s planned sale of some of its assets to Enrique Razon’s Bloomberry Resorts Corp. fell through.

SyCip Gorres Velayo & Co. (SGV), PH Resorts’ auditing firm, has already sounded the alarm on the listed hospitality company’s ability to continue operating.

PH Resorts, for its part, said it has ongoing discussions with lenders, including state-owned Land Bank of the Philippines, to support its liquidity requirements by extending maturities to up to September 2028.

In a report contained in a recent filing by PH Resorts, SGV said PH Resorts had incurred a net loss of P801.9 million in 2022 and P153 million in 2021, resulting in a deficit of P1.1 billion and P337.5 million as of end-2022 and end-2021, respectively.

SGV said this was a material uncertainty as this put the company’s current liabilities in excess of its assets by P2 billion at end-2022 alone and a negative operating cash flow of P67.3 million.

“These conditions, along with other matters as discussed, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern,” SGV said.

PH Resorts said that it is in talks with Landbank to further extend the principal and interest payments of its loans with the state-owned lender.

Currently, these are due to be paid equally over the remaining life of the loan starting March 3, 2024 until the loan’s maturity on Sept. 1, 2028.