Next Mobile acquires 33% of Cashrounds

Gamboa Holdings, a subsidiary of the Velarde Group of Companies and part-owner of digital trunk radio firm Next Mobile, finally pushed through with plans to acquire an initial one-third stake in publicly listed company Cashrounds for P36.9 million.

A total of 9.33 million shares of Cashrounds, an online investment matching company, were sold by Amalgamated Investment Bancorporation to Gamboa Holdings through the Philippine Stock Exchange via a block sale for a purchase price of P3.95 per share last June 3. This represents around 33.33 percent of Cashrounds’ total outstanding stock of 28 million common shares.

Officials of the Velarde Group told The STAR that another one-third stake in Cashrounds will be acquired by Gamboa Holdings sometime in July or August this year.

Under a memorandum of agreement (MOA) entered into last March 18 between Gamboa and Amalgamated, the shares will be bought and transferred in two tranches. "This is just the first tranche. The second tranche will happen in July or August and we do not foresee any problem with acquiring a total of two-thirds stake in Cashrounds," a company official said.

Under the MOA, Gamboa Holdings shall expand Cashrounds’ business by building on its existing information technology platform in order to introduce related products and services such as cash remittance, point of sale, among others, and integrating wireless communications technologies.

Amalgamated is a local investment bank engaged in providing knowledge-based corporate finance and money markets services for its corporate and private clients. The Velarde Group, meanwhile, controls Next Mobile.

The acquisition by Gamboa Holdings of Cashrounds came after the collapse of the merger talks between Next Mobile and another publicly listed entity Premier Entertainment Productions (PEP).

Next Mobile was supposed to acquire more than 97 percent stake in PEP via a share swap deal. Next Mobile was reportedly planning on using PEP as a backdoor listing vehicle to raise funds for its expansion program. However, the March 2004 agreement between Next Mobile and PEP expired without the two parties agreeing on a purchase deal.