Philweb, ISM set to execute buy-in deal

Listed technology companies Philweb and ISM Communications Corp. (formerly Itogon-Suyoc Mines Inc.) said yesterday they are now ready to execute a much-delayed share buy-in deal that was obstructed by a court injunction last June.

In a letter to the Philippine Stock Exchange, corporate information officer for both Philweb and ISM Roberto Valdes said the temporary restraining order (TRO) issued by the Court of Appeals last June 10 "has expired and that no preliminary injunction was issued by the said court."

"Therefore, Philweb and ISM will now proceed to conclude the private placement transaction," Valdes pointed out.

The CA issued a TRO on the private placement of ISM shares by Philweb, both chaired by former Trade Secretary Roberto Ongpin, in response to an April 25 derivative suit filed by stockbroker Robert Coyiuto Jr. against the PSE – where ironically he is an incumbent director – and the Ongpin group from enforcing the private placement transaction.

Under the private placement deal, Philweb would subscribe to 40 percent of ISM as payment for managing and transforming the company to an infotech and multi-media business venture.

In his objection, Coyiuto said the deal would first have to go through the Exchange’s rule on additional listing requiring companies to first make a rights or public offering before undertaking a private placement, debt-to-equity swap, share-for-share or property-for-share conversions, and other similar transactions.

The previous PSE board of directors and its listing committee chaired by Coyiuto denied last year the request of ISM to exempt it from this rule, forcing the latter to bring up the case to the Securities and Exchange Commission (SEC) which, in turn, ruled to contrary.

ISM had argued that since it is a losing company, it cannot afford a rights offering as no underwriter would be willing to assume the risks and the capital infusion from Philweb would be needed to resurrect its operations and bail it out from its present predicament.