PhilWeb mulls equity fund raising exercise

MANILA, Philippines - Listed information technology and gaming firm PhilWeb Corp. may undertake an equity fund raising exercise to expand its existing public float and fund new ventures.

“The company is considering, subject to finalization and approval by its board of directors, an equity fund raising exercise to broaden its current investor base and to raise proceeds for the company at the earliest possible time,” Philweb said in a disclosure to the Philippine Stock Exchange (PSE).

Philweb said the fund-raising activity would involve the sale offshore of shares by the company’s controlling shareholder – former trade and industry minister Roberto V. Ongpin in the IT firm.

Simultaneous with this sale, Ongpin and certain of his affiliates will enter into an agreement with Philweb to subscribe for the same number of shares they have collectively sold, which will be equivalent to no more than 26 percent of the company’s resulting outstanding capital stock.

Philweb has yet to decide on the terms of the fund-raising exercise and said the placement may or may not proceed, depending on the extent of investor appetite and market conditions.

Upon completion of the two-stage equity exercise, Ongpin and his affiliates’ shareholdings will neither increase nor decrease, Philweb said.

Questions have been raised on the nature of this fund-raising scheme, fuelling speculations that a very influential personality who owns shares in Philweb is unloading his interests ahead of the elections.

PhilWeb is a lead technology enabler of state-run Philippine Amusement and Gaming Corp. (Pagcor) whose core businesses include e-Games Cafes, Internet sports betting stations, mobile phone gaming, and online casino gaming. It opened 50 e-Games Cafes last year to bring total outlet network to 171.

The company, through Philweb Homeplay Inc., recently launched its latest gaming service, www.egamesonline.com.ph, the first Internet-based casino gamingwebsite. Homeplay will offer traditional casino gameslike blackjack, baccarat, roulette and slots to Filipino players that are 21 or older.

It earlier formed a P1 billion wholly owned subsidiary, PhilWeb International Gaming Corp. which shall operate foreign government-franchised gaming businesses outside the Philippines beginning this year.

Given improving contributions from existing businesses as well as new investments, PhilWeb expects its net income to exceed the P1 billion mark this year. Its other products include BasketballJackpot, Premyo Sa Resibo and the Bid Wars mobile game.

Last year, Philweb posted a net profit of P552 million, up 89 percent from 2008 level. The bulk of earnings or P523 million came from core gaming operations which represented an increase of 126 percent over the previous year. The balance of P29 million came from PhilWeb’s equity investment in ISM Corp., amounting to P633 million.

Revenues reached P820 million, 82 percent higher than year earlier level, mainly driven by the opening of new e-Games cafes.

PhilWeb is an active partner of the Bureau of Internal Revenue (BIR), through the Premyo sa Resibo (PSR) raffle, which is aimed at encouraging consumers to ask for official receipts for every purchase made. PSR is a nationwide, mobile phone text-based raffle program where consumers send in data from their official receipts in exchange for electronic generated raffle entries.