The Market Monitor Minding the Nation's Business
By Riza Lozada
The Securities and Exchange Commission (SEC) has approved the P2- billion special block sale of common shares held by businessman Roberto V. Ongpin (RVO) in Philweb Corp. to Gregorio Araneta Incorporated (GAI) that puts into motion a tender offer of the shares are required by the bourse.
The SEC, through the Securities and Markets Regulation Department (MSRD), informed listed firm Philweb (WEB) that the special block sale was approved pursuant to the share purchase agreement between RVO and GAI through the special block sale of 653,151,896 common shares through the Philippine Stock Exchange.
In a disclosure to the Philippine Stock Exchange (PSE), PhilWeb said KPMG (R G Manabat and Co), Ongpin’s financial advisor for the sale, has announced the sale of 771,651,896 or about 53.76 percent share in PhilWeb to Gregorio Araneta Inc.
The shares were sold at P260 apiece, it said. The disclosure said the deal will be implemented in two tranches, the first of which is the special block sale, upon approval of the PSE, of 653,151,896 shares.
The last tranche involves the sale of partially paid shares totaling about 118.5 million. The report said these shares are “now fully paid but needs to be registered for listing at the PSE.”
“This second tranche is scheduled as soon as the registration of these shares at the Philippine Stock Exchange is completed and will be transacted at the same price as the special block sale for the first tranche,” it said.
Ongpin resigned as PhilWeb’s chairman last Aug. 4 while Araneta was elected chairman and director for the company last Sept. 9. Dennis O. Valdes remains its president.
The divestment of Ongpin was meant to shield the company from the fallout of President Duterte’s campaign against online gambling and his naming of Ongpin as an example of local oligarchs that he wanted destroyed.
The new PhilWeb management hopes to reapply for the continuation of its license with state gaming firm Philippine Amusement and Gaming Corp (Pagcor) for its nationwide network of eGames cafes. The company’s license lapsed last Aug. 10.
After Pagcor rejected an earlier offer of Ongpin to donate 49 percent of his stake in PhilWeb Corp., the magnate attempted to donate his shares the proceeds from which he said will be used in building drug rehabilitation centers nationwide. Pagcor also rejected Ongpin’s offer.
Last Aug. 17, Ongpin offered to Pagcor majority of his 53.76 stake or about 771 million shares worth around P20 billion in PhilWeb, with the objective to save the jobs and livelihood of some 6,000 people working for the company.
In rejecting Ongpin’s donation, Pagcor stated that “the issue is not RVO (Roberto V. Ongpin) or PhilWeb per se. It is the President’s and his government’s opposition to on-line and on-site electronic gaming because of the social ills and decay they foist on our communities as they cater to the more economically vulnerable portion of our population”.
“In rejecting my offer to donate 49 percent of my PhilWeb’s shares to PAGCOR… I, of course, have no choice but to accept this decision by Pagcor,” Ongpin then said in a letter to Pagcor.
“I hereby amend my donation to be used exclusively for the establishment of a nationwide network of drug rehabilitation centers,” he noted.
“I am a firm believer in the President’s drive against the drug menace… While one can agree that gambling is undesirable, nothing could be more pernicious that the drug menace which destroys the very fabric of our youth and our society, and which admirably, the President has chosen as his first priority,” Ongpin said.
Mr. Duterte had said that he would “destroy the oligarchs that are embedded in government” and cited PhilWeb’s Ongpin as one of them.
Ongpin resigned as chairman and director of the company the day after the President’s statement.
PhilWeb recently disclosed also selling its investment in Acentic GmbH to Niantic Holding GmbH for $750,000. The company has also collected the sum of 1.97 million euro from Acentic, in full settlement of its loan receivables.
Thus, in total, the company will have cash proceeds of approximately P140 million. This amount will be utilized by the company to cover its overhead while it awaits the reissuance of its license from Pagcor.