DITO Telecommunity, the country’s third telco player, is far from meeting its commitment of bringing 27Mbps of Internet speeds to the Philippines through 1,600 cell towers. Days before its supposed technical deadline on July 8, the firm under Davao-based businessman Dennis Uy’s Udenna Corporation has only set up 300 operational cell towers.
Apart from the major setbacks that challenges DITO Telecommunity, based on reports, Uy is also facing growing debts due to his buying spree of companies in the country. In an article published on Rappler dated January 2019, a finance expert said that Uy is “spreading himself too thin,” and that a look at the earnings of the companies compared to liabilities is enough proof of Uy’s “very weak balance sheet.”
Based on the same report, Uy has 47 firms under his belt encompassing various essential industries in the country, 36 of which he bought through bank loans after President Rodrigo Duterte was elected.
Uy, who’s known to be an ally and a close friend of Duterte donated P30 million to the latter’s presidential campaign, making him one of the largest donors to support the then Davao mayor’s candidacy. The businessman’s connection to the president surely has an impact on why banks continue to lend him loads of money, according to bank experts.
“It’s a gray area, and banks are betting on Uy. It helps that he’s close with Duterte. But if loans go any further and the balance sheet keeps on tilting, banks may lose trust,” an anonymous banker told Rappler.
Among Uy’s biggest lenders include the BDO Unibank, Philippine National Bank, and Bank of China-Cayman branch.
In 2017, Uy’s Udenna recorded a 200% increase on its year-on-year debts, with its interest bearing loan reaching P85.8 billion. In the same year, Uy jotted his most expensive transaction for 2017 amounting to P34.1 billion which was utilized for the acquisition of shares in Global Gateway Development Corporation which supervises the 177-hectare of Clark Freeport Zone. Uy’s buying spree has resulted in P70.1 billion spending, a figure that’s 606.9% up on its year-on-year.
These numbers are expected to skyrocket even more, especially that in the succeeding years after 2017, Uy has ventured into more companies, including DITO Telecommunity, which is expected to spend up to P257 million in five years. Since DITO has yet to record revenue, especially the continuous delay in its commercial launch, Uy is up against yet another wave of debt.