Davao tycoon Dennis A. Uy’s PH Resorts Group Holdings Inc. informed the Philippine Stock Exchange (PSE) that “a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern.”

It added that, because of this, “the group may not be able to realize its assets and discharge its liabilities in the normal course of business.”

However, with backing from its parent company Udenna Corp., the firm continues to look for a white knight that will help it complete its resort projects and return the company to financial viability.

The group’s option to repurchase its parcels of land in Mactan and the construction in progress for a resort-casino under a sale and leaseback (SLBB) arrangement with China Banking Corp. (Chinabank) expired on March 31, 2025.

In connection with this, the corresponding property plus improvements totaling ₱13.65 billion, as well as the financial liabilities of ₱8.75 billion originating from the SLBB repurchase option, were derecognized from the books of its subsidiaries.

For the first nine months of 2025, the group reported a net loss of ₱6.85 billion, mainly due to a ₱7-billion loss on extinguishment of financial liability related to the Chinabank SLBB transaction, which resulted in a deficit of ₱11.76 billion and a capital deficiency of ₱5.94 billion as of Sept. 30, 2025.

“Based on management analysis, the loss on extinguishment of financial liability due to the Chinabank SLBB transaction is lower at ₱3.287 billion if offset with the unrealized revaluation surplus (accumulated appraisal gain) from appraised value of the subjected property,” PH Resorts said.

The firm said its current liabilities now exceed its current assets by ₱4.8 billion as of Sept. 30, 2025, lower than the ₱13.587 billion as of Dec. 31, 2024. The group has negative operating cash flows of ₱38.4 million and ₱127.8 million for the nine months ended Sept. 30, 2025, and 2024, respectively.

As the group’s projects are in the development phase, construction spending and pre-operation costs typically result in cumulative net losses over prior periods.

The group historically had sufficient equity in excess of these losses; however, construction development expenses combined with other factors such as financing costs led to a negative equity position as of Sept. 30, 2025, and Dec. 31, 2024.

Due primarily to the higher net loss of ₱6.85 billion for the first nine months of 2025—mainly due to the ₱7-billion loss on extinguishment of financial liability related to the SLBB transaction—total deficit increased to ₱11.76 billion, leading to a capital deficiency of ₱5.93 billion.

“As the group expects at least ₱4.48 billion in advances for future stock subscription, ₱1.15 billion in advances from related parties, and ₱718 million in deposits for future stock subscription to be converted into equity upon the planned increase of its authorized capital stock, this capital deficiency will be largely eliminated and cured,” PH Resorts said.

However, the group said it received a letter of financial support in April 2025 from Udenna, its ultimate parent company, stating that it commits and is willing and has the ability to provide continuing support to the group with respect to its liabilities.

Udenna has continued to cover other operating expenses (opex) and the maintenance of the group’s other properties and has demonstrated that it has the ability and willingness to support the group in its financial obligations.

Also, negotiations are ongoing with the group’s existing lenders, Chinabank and Land Bank of the Philippines (Landbank), on proposed loan repayment arrangements or schedules in connection with ongoing strategic investor discussions for PH Resorts or its subsidiaries holding its Mactan and Bohol assets.

The firm said a memorandum of agreement (MOA) was signed between PH Resorts and third-party entities in April 2025 for a potential purchase of properties or shares of stock, and discussions and negotiations are still ongoing.

It added that it has additional ongoing strategic investor discussions with other parties, and that due diligence is ongoing and in various stages of completion.

“Management believes that considering the progress of the steps undertaken to date, these financing and capital raising plans are feasible and will result in negotiated agreements to enable the group to meet its obligations when they fall due and address the group’s liquidity requirements to support its operations and the resumption of its projects,” PH Resorts said.