PH Resorts Group, the developer behind the long-delayed Emerald Bay resort in Cebu, is scrambling to fix its negative equity situation by converting internal liabilities into common stock. The company, backed by Udenna Corporation, reported a deficit of PHP 503.7 million (approximately USD 9 million) as of Q1 2025.
The deficit stems from PHP 4.21 billion in capital infusions from its parent company, which had been recorded as liabilities due to limited authorized capital stock. These entries tipped the balance sheet into negative equity territory — raising red flags with lenders and market observers.
To address the issue, PH Resorts is proposing an increase in its authorized capital from PHP 8 billion to PHP 15 billion. Once approved at the upcoming shareholders’ meeting, the move will allow the conversion of PHP 3.37 billion in advances and PHP 718 million in subscription deposits into equity. This would bring the company’s pro-forma equity up to PHP 2.86 billion (about USD 50 million), restoring compliance with regulatory requirements.
But while the balance sheet may recover on paper, the Emerald Bay project remains in limbo. No construction progress has been reported in months, and investor interest continues to falter. China Banking Corp, which financed the property acquisition, is reportedly considering selling the 12.4-hectare plot after PH Resorts missed its repurchase deadline.
With total liabilities exceeding assets by over PHP 12 billion, the financial pressure is mounting. The equity conversion is a temporary fix—but unless a strategic investor steps in or the stalled project resumes, Emerald Bay faces a growing risk of foreclosure or asset liquidation.
