PhilWeb defers fund-raising exercise

MANILA, Philippines - Listed information technology and gaming firm PhilWeb Corp.’s planned equity fund raising exercise would have to wait until after the May 2010 elections, according to a top company official.

In a text message, PhilWeb president Dennis Valdes said the company would have to postpone its planned equity issuance due to uncertainties on the local political front.

He said the company is in no rush to raise new capital as it awaits the government’s action on its plan to operate SMS-based lottery.

In its disclosure filed with the Philippine Stock Exchange last month, PhilWeb said it needed to raise fresh equity “at the earliest possible time but pointed out that the fund-raising activity may or may not proceed depending on the extent of investor appetite and market conditions.

The fund-raising activity, which was approved by the company’s board of directors, would involve the sale overseas by PhilWeb controlling shareholder Roberto V. Ongpin of around 26 percent of his stake in the listed firm.

“The roadshow was never finalized because of the volatile situation on the political front. Investors are looking for clarity on the text lotto project which we cannot yet provide because of the TRO. Lastly, PhilWeb’s requirement for new capital is not imminent and as such, we will schedule an equity issuance exercise when the timing is right,” Valdes said.

“Just to be clear, PhilWeb did not speak to investors and are just being advised by its bankers of what the investors have said as a result of the recent release of UBS’s report on the company,” Valdes added.

Valdes, nevertheless, remains optimistic that the May 2010 elections would “prove how well entrenched our democratic foundations are and then foreign capital will once again be attracted to the many opportunities in our country.”

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., launched the first Internet-based casino gamingwebsite, offering traditional casino games like blackjack, baccarat roulette and slots to Filipino players that are 21 or older. 

Its other products include BasketballJackpot, Premyo Sa Resibo and the Bid Wars mobile game.

To expand horizons, PhilWeb had 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 growing contributions from existing businesses as well as new investments, PhilWeb expects its net income to exceed the P1 billion mark this year. 

Last year, PhilWeb posted a net profit of P552 million, 89 percent higher than the previous year. 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.