Philippine business tycoon Dennis Uy is in a divestment campaign to cut his conglomerate's debt, which had skyrocketed following an aggressive acquisition spree.
The businessmen and CEO of the country's newest mobile operator had invested billions of dollars in more than a dozen companies in industries such as food, energy, and construction.
Uy's leverage-backed acquisitions and investments have raised concerns about his group's debt profile; particularly as the country has yet fully emerged from a recession caused by the COVID-19 pandemic.
His fuel retail company Phoenix Petroleum Philippines said Tuesday that it has already entered into negotiations for the sale of some of its assets and investments as part of its "debt management and funding activities."
The planned divestment follows the sale of Uy's entire stake in Philippine logistics company 2GO Group. Uy's Chelsea Logistics and Infrastructure Holdings sold their combined 31.7% stake in 2GO to SM Investments for $136 million.
Uy backed the presidential campaign of President Rodrigo Duterte. He was already a well-known business tycoon from the city of Davao, where Duterte served as mayor before becoming the country's president in 2016.
After Duterte won the elections, Uy embarked on a massive expansion that involved the acquisition of shipping lines, convenience stores, schools, and even a Ferrari car dealership. Uy said in a recent interview that the aggressive expansion was him betting on the country's economic prospects under Duterte.
"[When] you believe in the leadership, you believe in the potential of the country," Uy said.
Uy's latest projects include the establishment of the country's newest mobile operator, Dito Telecommunity, which is obliged to invest at least $5 billion over the next five years.
Uy is actively bidding to acquire Royal Dutch Shell's 45% stake in a local gas field, which supplies around 40% of the northern Philippines ' power requirements. Uy successfully made a bid for Chevron's Philippines assets last year worth an estimated $565 million.
Uy's privately held holding company Udenna shrugged off concerns about its mounting debt. The company said that its debt-to-equity ratio has been improving - from 3.09% in 2018 to 2.7% in 2019. The company has yet to release its financial results for 2020.
