Philweb, ePLDT execute investment agreement

Publicly listed information technology company Philweb, majority owned by former Trade Minister Roberto Ongpin, and ePLDT yesterday executed an investment agreement covering the proposed subscription by ePLDT to 20 percent of Philweb.

The investment and subscription agreement covers 25.12 billion new common shares of Philweb equivalent to 20 percent of the resulting expanded outstanding capital stock at a price of two centavos per share or a total of P502.4 million.

With its investment, ePLDT shall be entitled to nominate three directors out of the 15 seats in the Philweb board as well as the vice chairman.

The PLDT board earlier approved the investment of its information and communications technology arm ePLDT in Philweb.

Philweb is primarily engaged in Internet-based gaming, through its appointment as principal technology service provider under the marketing consultancy agreement for Internet sports betting and Internet casino with the Philippine Amusement and Gaming Corp. (PAGCOR).

Philweb offers Internet sports betting in over 230 Pagcor Internet sports betting stations (ISBS) and over 40 Internet casino stations nationwide. ePLDT said it plans to assist Philweb in the nationwide rollout of its Internet sports betting stations and Internet casino stations, using principally the telecommunication network resources of the PLDT Group.

The investment will enable the PLDT Group, through ePLDT, to gain a firm hold on legitimate gaming content for its mobile business as well as its wired and wireless broadband (PLDT DSL and Smart Bro) businesses, and to influence the nature of the content consistent with the requirement of the PLDT Group to increase the usage of its various network resources.

Officials said the investment will also allow the PLDT Group, through ePLDT, to have a share in the equity and business values created for Philweb by its use of the PLDT Group’s network resources, in addition to the normal network access fees being charged by the PLDT Group.

The business of Philweb relies heavily on the extensive use of telecommunications networks to sustain its substantial service revenue and profit growths consistent with the anticipated growth of the total gaming industry.

This transaction complements and completes ePLDT’s strategy to invest in compelling online gaming content, which includes its investments in Level Up Philippines, Inc. and netGames, Inc., both of which are also heavily dependent on the extensive use of the PLDT’s Group’s network infrastructure and resources.

ePLDT reported service revenues of P3 billion in 2005, a 42-percent increase from P2.1 billion in 2005 in the previous year as its various business segments continued to post results.

Aside from its call center businesses, ePLDT’s business segments include Netopia, which undertook a significant expansion in 2005. The country’s largest Internet cafe chain now has 181 cafes nationwide.