E-Games breaks into casino gaming, tourism

MANILA, Philippines - IP E-Game Ventures Inc., the listed online gaming subsidiary of IP Ventures Inc., is acquiring a 25-percent stake in Cosamera Resorts Corp. for a still undisclosed price, marking its entry into casino gaming and tourism.

In a disclosure to the stock exchange yesterday, E-Games said the move is in line with the change in its primary thrust to venture into the hotel, resorts and gaming businesses.

Cosamera is a company with primary business in the Cagayan Special Economic Zone (CEZA).

E-Games said the plan, approved by the company’s board, would involved the acquisition of an initial 25 percent and the purchase of an additional stake at a later date.

“Tourism is expected to become a major growth driver of the Philippine economy as the government steps up its tourism campaign...The company hopes to undertake projects in this area as part of its mandate to invest in growth sectors of the economy,” E-Games said.

E-Games said its sister firm IP Converge Data Center Inc. also has a joint venture in CEZA operating data centers and communication links.

“E-Games is expected to substantially improve its financials from the acquisition. The company’s activities in this sector should translate to an accelerated growth in revenues and earnings,” E-Games said.

Philippine casinos are generating record revenues as the country cashes in on Asia’s flourishing gambling market. State regulator Philippine Amusement and Gaming Corp. (Pagcor) is aiming to become Asia’s next big gambling hub with its Entertainment City project along Roxas Blvd.

Pagcor registered P36.65 billion in total revenues last year, up 16.5 percent from P31.46 billion a year earlier on robust performance of the gaming tables and slot machine operations in different casinos and arcades.

E-Games plans to raise up to P373.52 million through a follow-on offering of shares. It is selling up to 1.334 billion primary and secondary shares at a maximum of P0.28 each.

Of the total, as much as 933.8 million shares will be issued by E-Games while up to 400.2 million shares will be sold by shareholder IP Ventures.

The equity transaction is aimed at complying with the bourse’s minimum public float requirement of at least 10 percent.

Maybank ATR Kim Capital Partners Inc. will serve as the lead underwriter for the offering.

E-Games said it intends to use proceeds from the sale share to finance the expansion of its Internet café retail outlets (P100 million), the acquisition of new content for its online games publishing business (P50 million), strategic acquisitions (P50 million) and working capital (P20 million).