{"id":316908,"date":"2022-08-30T09:10:58","date_gmt":"2022-08-30T01:10:58","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=316908"},"modified":"2023-01-08T15:33:28","modified_gmt":"2023-01-08T07:33:28","slug":"commentary-udenna-companies-for-sale","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/commentary-udenna-companies-for-sale\/","title":{"rendered":"Dennis Uy’s Udenna Group officially puts up its companies for sale"},"content":{"rendered":"\n

Udenna Group, the company of Davao-based businessman Dennis Uy, is open to selling its \u201ccrown jewels\u201d as part of its plan to pare down debt. The private company, which owns several publicly-listed companies such as Phoenix Petroleum (PNX), Chelsea Logistics & Infrastructure Holdings Corp. (C), PHR Resorts (PHR) and Dito CME Holdings Inc (DITO), would prefer to hold on to its \u201ccrown jewels\u201d but would not object to an attractive offer.<\/p>\n\n\n\n

A month after receiving a notice of notice of default from BDO Unibank (BDO), Udenna has officially put up its assets for sale. Dennis Uy mentioned that the Group is welcoming bids. A cursory check on the financial health of Udenna\u2019s listed subsidiaries would show which companies will get a fair bid and which ones could be sold for a song.<\/p>\n\n\n

\n
\"\"<\/figure><\/div>\n\n\n

From the table above, PNX is the only listed subsidiary with a decent current ratio of 0.87x while the rest have faced serious solvency issues if they cannot find a white knight soon. PHR is already in talks with Bloomberg Resorts Corporation (BLOOM), albeit nothing final. Chelsea (C) may not have a hard time finding a suitor, however, it must be noted that most of its vessels have been pledged to BDO and Chinabank as security for the loans they have extended to the company.<\/p>\n\n\n\n

That leaves us with DITO CME Holdings Corp. (DITO), the much-touted telco challenger who is now on its 3rd year of operations and on pace for a much higher net loss this year. Net loss as of 1H2022 was at Php 15.4 billion.<\/p>\n\n\n\n

We think the sale of Udenna\u2019s assets could take a while before a deal is finalized, as the Group\u2019s lenders will also have to be appeased on the restructuring plan. However, we think that the telco sector could see a re-rating as DITO drops out of competition. While its franchise extends up to 2036, DITO not only needs a patient lender but also a savvy telco operator who can effectively disrupt the landscape.<\/p>\n\n\n\n

Since making noise in late 2018, GLO and TEL upped their CapEx to no less than 40% of revenues to defend market share while sentiment soured in anticipation of lower dividend yields and lower ROE. PE ratio has dropped from 17.5x to 12.6x for TEL and from 20.3x to 14x for GLO. We think the moat will just get deeper as Udenna fixes its books.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here’s a commentary on an important issue or event affecting the stock market <\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-316908","post","type-post","status-publish","format-standard","hentry","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/316908","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=316908"}],"version-history":[{"count":2,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/316908\/revisions"}],"predecessor-version":[{"id":320526,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/316908\/revisions\/320526"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=316908"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=316908"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=316908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}