MANILA (2nd UPDATE) - Davao-based businessman Dennis Uy's Udenna Corp. on Saturday confirmed receiving a notice of declaration of default on July 22 from lenders led by BDO Unibank, but maintained that "there has been, in fact no event of default or at the very least, no irremediable event of default."

The notice was issued against Clark Global City Corporation on the grounds of “continuing and irremediable events of default” in relation to a master lease agreement between state-owned Clark International Airport Corporation (CIAC) and Global Gateway Development Corporation (GGDC).

Default occurs when a borrower fails to make required interest or principal repayments on a debt.

Clark Global City Corporation (CGCC) is wholly owned by Udenna Development Corporation, a subsidiary of Uy’s Udenna Corporation.

CGCC owns GGDC, which holds leasehold rights to 177 hectares of land within the Clark Civil Aviation Complex at the Clark Freeport Zone in Pampanga.

"In contention, we replied to the consortium banks to dispute their conclusion and clarified that, under the circumstances, there has been, in fact no event or default or at the very least no irremediable event of default under the master lease agreement on the part of CGCC (Clark Global City Corp) or GGDC (Global Gateway Development Corporation)," Udenna Corp. said in a statement Saturday.

Udenna did not disclose the values of the loan in question or its lease with CIAC.

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A report from the Philippine Daily Inquirer said Banco de Oro has moved to foreclose Uy's loan collateral, citing three senior bank officials who spoke under anonymity.

In the report, a source was quoted saying the liability or loan in question was small, at $4 million or over P224 million.

According to the report, the default "could lead to the largest corporate default in Philippine history."

The report also noted that Uy would be given until July 26, 2022, to resolve the issue.

ABS-CBN was able to confirm with a source familiar with the matter that Uy is being given a chance to resolve the issue amicably.

The Inquirer also reported that there are concerns regarding what the potential default would mean for Uy’s other loans.

Uy’s listed businesses include fuel retailer Phoenix Petroleum, shipping company Chelsea Logistics, gaming company PH Resorts Group, and the holding company for his telecom business DITO CME.

Based on their latest annual reports Phoenix Petroleum has liabilities worth P65.1 billion, Chelsea has liabilities worth P28.5 billion, PH Resorts has liabilities worth P11.9 billion while DITO CME has liabilities worth P139.2 billion as of the end of 2021.

Uy's main holding company Udenna is not listed on the Philippine Stock Exchange.

Banking industry sources told ABS-CBN News that the concerns have to do with a cross default provision within Uy’s loan contracts which would make any default by Uy a default on all of his other debts.

Uy was a supporter of former President Rodrigo Duterte, having contributed to his election campaign in 2016.

During the Duterte administration, Uy went on a debt-fueled expansion and acquisition spree.

His purchases include a controversial deal to take over the operation of the Malampaya Gas Field from Shell and Chevron, valued at over $1 billion.

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He also executed smaller deals to take over restaurant chain Conti’s, convenience store chain Family Mart, and Enderun Colleges, to name a few.

Uy also won a highly publicized bidding for the rights to set up a third major telco player in the Philippines, which he used to launch DITO Telecommunications with China Telecom.

He has denied receiving preferential treatment during the Duterte administration. He has insisted that all of the deals and acquisitions are above board.

Uy, meanwhile, has been actively selling assets. In June, shipping and gambling tycoon Enrique Razon’s Prime Infra holdings announced a deal to buy out Uy from Malampaya.

It was also announced in May that Razon’s casino business Bloomberry will acquire interests in Uy’s casino businesses in Cebu and Clark from PH Resorts.

Uy’s Chelsea Logistics meanwhile sold its entire stake in another listed logistics firm 2GO to SM in 2021.

Chelsea had acquired a majority stake in 2GO in 2017. Some news reports mentioned Clark Global City as another Uy asset possibly up for sale.