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Manila Bulletin devider Business devider The Stock Market devider Dennis Uy's PH Resorts to wipe out negative equity even without new investor

Dennis Uy's PH Resorts to wipe out negative equity even without new investor

Published Jul 14, 2025 02:22 pm
PH Resorts Group Holdings Inc., the integrated resorts unit of Davao tycoon Dennis A. Uy’s holding company Udenna Corporation, assures the Philippine Stock Exchange that it can wipe out its negative stockholders’ equity with the conversion of shareholders’ advances to common shares.
However, the company is silent on the possibility of buying back its Emerald Bay project which had been foreclosed by China Banking Corporation. It also does not mention any prospective new investor, the last of which was EEI Corporation.
In a letter to the PSE, PH Resorts said it has a negative equity position of ₱229.6 million as of December 31, 2024 and this has ballooned to ₱503.7 million by March 31, 2025 due to pre-operating costs and construction development expenses related to its shelved Emerald Bay project in Mactan as well as other factors.
A significant factor contributing to the negative equity is the classification of capital infusions from Udenna Corporation as a liability.
These capital infusions, amounting to ₱4.21 billion as of March 31, 2025, were booked as advances for future stock subscriptions, a liability in the Statement of Financial Position due to insufficient authorized capital stock of PH Resorts.
“This accounting treatment materially impacts the equity position and does not reflect the parent’s continuing financial support and long-term commitment to the Company,” PH Resorts assured.
The firm said that, last April 30, 2025, the Group has worked towards an increase of its authorized capital stock from ₱8.00 billion to ₱15.0 billion, which was previously approved by its board of directors and shareholders.
The application for increase will be presented for reapproval by the stockholders during the upcoming 2025 Annual Stockholders' Meeting to be held on July 17, 2025 as the Securities and Exchange Commission requires that the application for increase is filed within six months from stockholders' approval.
Once the application is approved, ₱3.37 billion of Advances for Future Stock Subscription and ₱718.0 million of Deposits for Future Stock Subscription will be converted to equity, and, thus, the proforma equity as of March 31, 2025 would be positive at ₱2.86 billion.
The firm also pointed to its restructuring arrangement with China Banking Corporation which led the company to incur significant finance charges (through lease payments and transaction costs) and finance losses stemming from the buyback option.
In connection with the full settlement and discharge of its Peso bridge loan balance and accrued interest, the Group entered into a Deed of Assignment with Chinabank whereby it gave up the Emerald Bay project, including the land title in favor of the bank.
Subsequently, PH Resorts entered into a lease agreement with Chinabank with the option to buyback the said properties.
However, Chinabank Chairman Hans T. Sy said last May that the bank is already in talks to sell it noting that, “We’ll start opening up to people who showed interest. There are a couple of interested parties.
“We gave Dennis, really, a chance to redeem. Of course he is appealing (nakikiusap) but we already gave him more than a year. It’s really in our name already,” Sy noted.
He added that, “They have a leaseback. They don’t have to renew that. No more. It’s expired now. We’re not renewing anymore… We always do things with a heart. We gave them a chance. That’s true. It’s almost two years. A year and a half. More than year. At least, we don’t want to really be very ruthless.”
Last December 6, 2024, Udenna executed a Memorandum of Understanding (MOU) with EEI regarding Emerald Bay in Punta Engano, Mactan Island, Cebu.
The MOU provides an avenue for a potential partnership between EEI and the Group, upon the execution of the definitive agreements and subject to the fulfilment of conditions precedent and regulatory approvals, if any.
The MOU also paves the way for EEI to execute an agreement with PHR to finance, construct, and complete Emerald Bay.
Advances of ₱300.0 million was received from EEI through Udenna in January 2025. These advances from a related party were used to partially fund the lease and interest payments to Chinabank.

Related Tags

Dennis A. Uy PH Resorts Group Holdings Inc. Emerald Bay China Banking Corporation Hans T. Sy EEI Corporation
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