Phoenix doesn’t deny debts owed to other tycoons, but...

Phoenix Petroleum [PNX 9.73 0.41%] [link], one of the many companies in the Dennis Uy Corporate Universe (DUCU), sought to clarify an article by Philstar that claimed PNX had “not been able to pay its suppliers”, and that Dennis Uy owed $12 million to some of the country’s most prominent businessmen and business families, including the Gokongweis, the Tans (both Andrew and Lucio), and others.

PNX’s clarification didn’t outright deny any of what was said in the article, but did say that the article was just “the opinion of the columnist”, that the article was “one sided”, and that the letter that the article was based on was “nothing new”. PNX also said that talks with those suppliers have “progressed”, that “negotiations [with those suppliers] are either on-going or completed”, and that PNX has “substantially settled some” of those obligations.

PNX went on to say that, just like every other company, PNX was negatively impacted by the pandemic, and that its business was negatively impacted by the Russia/Ukraine conflict because of the volatility in crude oil prices, and that these challenges were felt not only by PNX, but “all other businesses in the country and in fact, globally with no exception”. PNX ended its clarification by saying that its “recovery is underway”, but it won’t be “immediate”, and it’s been hampered by “threats of a recession”.

MB BOTTOM-LINE

Whispers of Uy-led companies missing or substantially delaying payments to suppliers have been circulating for years. It’s one of the worst-kept secrets in the DUCU. This clarification didn’t deny any of what it dismissed as “opinion”, instead, it seemed like PNX just got triggered and wanted a chance to grab the microphone and cry a bit for the cameras to explain why things have just been so hard.

I do not envy the managers and executives in the DUCU, tasked with keeping this leaky ship afloat, amid all the chaos both internal or otherwise. It’s enough to turn a CFO’s hair gray. PNX is right, in that the pandemic has been hard for nearly every company, both here and abroad, but it’s also been extremely difficult for basically every single person on the planet, to one degree or another. PNX isn’t the only one struggling with debts incurred to support a lifestyle that got nuked when the lockdowns started and that hasn’t come back nearly as quickly as anyone wanted. But many other companies seem to have begun to right the ship. If PNX wanted to be helpful, it could have provided an updated balance owing relative to the debts mentioned in the article, or it could have reassured investors with tangible measures that PNX has taken to shore-up its ability to meet its obligations as they come due, but it didn’t do that.

I respect that debt management is difficult under these circumstances, but these are missed opportunities to make things better for investors/shareholders by providing clear, unambiguous guidance on the state of things and what is happening to improve it. This is not a good situation for anyone... except (so far) for those that bought the DUCU dip.

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