Dennis Uy breaks silence; claims US$191-M capitalization in Malampaya buy
By Myrna M. Velasco
Davao businessman Dennis A. Uy finally broke his silence to refute allegations of "negative working capital" as he claimed that his Udenna subsidiaries have $191 million capitalization, not $100 million, when he acquired 90-percent of the Malampaya gas field in the two-tiered asset deal.
In a letter to the Board of Trustees of the Makati Business Club (MBC) to which he is a member, Uy stated “the combined capitalization of the two companies – UC Malampaya Philippines and Malampaya Energy XP – that acquired the Chevron and Shell shares in SC 38 (Service Contract 38) - is $191 million.”
He said “the documents of these two companies were certified at the Philippine consulate in Singapore and have been shared with the relevant Philippine authorities.”
Uy admitted that his holding company Udenna “has been hit hard by the pandemic as most of us globally. However, we would like to clarify that the financing of Udenna Corporation is independent of Malampaya.”
He further emphasized that “international lending companies and institutions who, together with Udenna, trusted enough in Malampaya...were willing to risk in the country’s future with us that paved the way for this investment of national significance.”
Given all the controversies hurled against the Malampaya acquisition, Uy asserted in his emotionally charged correspondence to the MBC that being a member of the organization with good standing, he has always expected to be “treated with fairness and justice.”
“I personally have chosen to remain silent amidst the allegations thrown at myself and Udenna, as I hoped that the truth about the Malampaya issue will eventually be known. But instead, the insinuations have not abated but have, in fact, continued and I for one, can no longer stay silent on this matter and allow others to further their agenda,” he stressed.
On the technical capacity of the two Udenna subsidiary-companies to operate the gas field, Uy noted that the workforce “will be the very same personalities and experts from Chevron and Shell who will manage and operate Malampaya.”
“These persons are the same highly knowledgeable and experienced experts who have been with Chevron and Shell for more than 20 years,” with him adding that “these expert teams are now supported by a parent company that has committed to invest in an urgently needed rejuvenation program to stem the decline at Malampaya,” he emphasized.
Uy opined “there is no need for Udenna to take on additional partners for the operation of the gas field since the very same experts who are currently operating and managing the Malampaya asset are still and will continue to be onboard.”
The Davao-rooted businessman narrated that when his company entered the telecommunications sector, “the same experience of having no track record has been bandied about when Udenna Corporation first announced its investment in DITO Telecommunity.”
Uy further conveyed “many said it was impossible to start from scratch, to create a world class telecom infrastructure in the timeframe given, and yet just eight months after the commercial launch, DITO now covers more than 50-percent of the population and boasts of four million subscribers, well on its way to hit five million by yearend.”
Relative to questions on the legality of the transaction and warranted government approvals, Uy averred “DOE (Department of Energy) approval is not required as has been the practice for the previous transfers of interest at the parent company level.”
He qualified that “both the Chevron and Shell transactions have sales conducted at parent company level with no change in the legal entities participating in the SC 38 consortium nor any transfer of any rights or obligations in the service contract.”
On November 11, 2021, some of the country’s most influential business groups led by the MBC strongly called on the Senate and concerned agencies to dig deeper and hold the government accountable for its failure to exercise its right of first refusal on the sale of Chevron and Shell shares.
“By failing to do so, the government may have given up tens of billions of pesos at a time when the government needs money more than ever and more importantly has put the country’s energy and national security at risk,” the groups said in a statement.
A subsidiary of Uy’s Udenna Corporation acquired in May this year Shell Philippines Exploration (SPEX) 45 percent interest in the Malampaya gas field. It also bought Chevron Malampaya LLC’s 45 percent interest in the gas field in 2019. Through these deals, Udenna effectively controls the gas field with a dominant 90 percent stake. State-owned Philippine National Oil Company-Exploration Corporation holds the remaining 10 percent.