Philweb planning to raise P5 billion for expansion

via CAAI

January 07, 2011

Ongpin-led online casino operator Philweb Corp. wants to generate as much as P5 billion from the sale of shares in an international offering this year, executives said on Friday.

Fresh capital will bankroll the company’s expansion locally and abroad, which will hike profits to more than P1 billion this year.

In a special stockholders meeting on Friday, Philweb Chairman Roberto V. Ongpin said the company wants to issue up to P5 billion primary shares "to fund international acquisitions."

"Part of the proceeds will be used for an aggressive expansion of our e-games business," Mr. Ongpin said.

Philweb Vice-Chairman Eric O. Recto said: "We may not be required to conduct a rights offer."

Last year, Philweb received a license from the Cambodian Ministry of Finance to operate a 6/49 lottery. The license allows Philweb to launch both paper-based and mobile-based forms of the lottery.

"The Cambodia license will be a game-changer for Philweb. Our international expansion strategy has begun to take root, and we expect that the other licenses we are working on, in countries such as Laos, Guam, Vietnam, Saipan, Palau, Papua New Guinea, East Timor, Nepal and others, will soon come to fruition," Philweb President Dennis O. Valdes said in a statement.

Mr. Ongpin said the company was "in serious discussions" with at least two international gaming companies.

Robust gaming operations boosted profits of the online casino operator to a record P708 million last year, the company told the local bourse on Friday. Further growth is expected this year as a result of local and international expansion projects.

"Unaudited net income for 2010 was P708 million, a record for the company. The amount is 28% higher than the P551 million achieved for 2009," the company said in a disclosure. "For the first time ever, revenues were over a billion pesos," it added.

Philweb recorded P1.04 billion in revenues, up by 27% from the previous year. "We are particularly pleased with our 2010 financial results, even though we only opened 19 new PAGCOR e-Games (PEGS) cafés all year," Mr. Valdes said, referring to online gaming shops licensed by the state-led Philippine Amusement and Gaming Corp.

"On the plus side, we have a new contract with PAGCOR that allows us to open a minimum of 100 new PEGS each year," Mr. Valdes added.

Philweb, which is controlled by former trade minister Mr. Ongpin, launched Home Play, the only peso-based online casino of PAGCOR, early last year. Other services of Philweb include the "Instant Premyo Sa Resibo" text raffle in cooperation with the Bureau of Internal Revenue, "Basketball Jackpot" offered through a network of 190 Internet sports betting stations, and "Bid Wars," a text-based reverse auction.

Mr. Valdes said the company remitted a total of P1.3 billion to PAGCOR last year. The amount is PAGCOR’s 60% share in the e-Games café and Internet sports betting station businesses of Philweb. PAGCOR did not spend capital or incur operating expenses for the partnership, Philweb said.

"Our new contract’s validity has been extended from the present 2012 until July 2016, and may be renewed further by mutual agreement," Mr. Valdes said.

Shares in Philweb closed P0.16 higher at P16.64 each on Friday. -- Neil Jerome C. Morales