Omico to push equity swap deal with Iemagine

Property development firm Omico Corp. will push through with its equity swap agreement with Chicago-based web developer Iemagine Inc. only until such time that market conditions for the deal improves, a company official said.

In a letter to the Philippine Stock Exchange, Omico corporate information officer James Noel de Leon said the sudden political and economic instability during the later months of 2000 which continued throughout 2001, coupled with the poor performance of IT stocks in the US "prompted the parties to reassess the agreement and hold its execution in abeyance until conditions improve."

Omico and Iemagine had agreed to exchange share almost two years ago, which would have put Omico into the Internet business.

The company has agreed to swap 9.75 billion of its common shares (worth P97.5 million at the time) for a 20-percent stake in Iemagine.

At the same time, de Leon said the deal was not approved by the company’s stockholders since the special meeting called for the purpose failed to muster enough votes, falling short of the required two-thirds of the capital stock issued and outstanding.

Iemagine is a leading designer and developer of web-based business-to-business (B2B) softwares focused on a field that comprises the "new wave" in the Internet market where it is a market leader: rental applications.

An Internet research company, Forrester Research Inc., has estimated that the market for application rentals has grown from $300 million in 1999 to over $6.4 billion in 2001, surging to an estimated $22 billion in 2002.

Iemagine supplies its software line through application service providers (ASPs) which then rent them out to Internet subscribers worldwide. Its softwares are part of the regular product offerings promoted and marketed by information technology giants IBM, Lotus and Encanto.

As a property company, Omico is part of a consortium with a Swedish group led by Vatenfall Generation Services Hydro International AB and Lars Brannstrom, an ABB Alstrom Power subsidiary, to construct power plants and environmental- and community-related projects worth a combined $760 million in Mindanao. – Conrado Diaz Jr.