Solid Group eyes multimedia services

Given the sluggish growth in the consumer electronics sector and the increasing volume of importation of CBUs (completely built-up units) due to lowering of tariffs, Solid Group Inc. (SGI) will seek opportunities in broadband and multimedia businesses and other areas as part of its investment portfolio diversification strategy.

In documents filed with the Securities and Exchange Commission, SGI said it will pursue new network-oriented businesses such as voice-over Internet-protocol services or VoIP, open access to other Internet and applications services providers, virtual private networks and online multiplayer network gaming.

Owned by the family of Joseph and Elena Lim, SGI manufactures consumer electronic products in the Philippines carrying mainly the Sony and Aiwa brand names.

SGI said it is eyeing other new businesses that could add value to the company.

In its bid to become the largest provider of multi-media services in the country, SGI will pursue plans to acquire sister company Destiny Cable Inc., and its subsidiaries Destiny Inc. and Destiny Satellite Corp. by issuing a specified number of its common shares to Destiny Cable to become the beneficial owners of 100 percent of the outstanding capital of these companies.

SGI plans to acquire Destiny Cable indirectly by buying AV Value bonds to be issued by AV Value Sales Corp., the parent company of Destiny Cable, which are convertible to Destiny Cable shares at SGI’s option. SGI will issue shares as payment for the AV bonds.

The integrated multimedia businesses of the Destiny Group are cable TV, high-speed Internet and leased line services, cable telephony, VSAT services, broadcast uplink and programming services.

The acquisition of the Destiny Group will allow SGI to maximize opportunities from the congressional franchise of wholly-owned subsidiary, Solid Broadband Corp. (SBC).

Last year, SBC obtained a congressional franchise to construct, install, and operate telecommunications systems throughout the Philippines under Republic Act No. 9116.

SGI intends to utilize the Destiny broadband infrastructure in operating the SBC franchise.

The company’s electronic export business which was undertaken by Kita Corp., a wholly-owned subsidiary, was discontinued in 2001 due to the absence of orders from its sole principal, Aiwa Co. Ltd. of Japan in the face of a global economic slowdown.

Management likewise approved a plan to dispose of all the assets of Kita Corp. and has been actively looking for buyers for these assets.

The firm’s Sony and Aiwa brand compete with other brands in the market. Based on industry data, the company has a market share (including toll manufacturing) of 31 percent, six percent, and 18 percent in the color television, video products and audio products, respectively for 2001.

SGI, through its subsidiaries, operates two consumer electronic production facilities in the Philippines. These are in Laguna International Industrial Park, Biñan, Laguna and Clark Special Economic Zone, Pampanga.