IPVG unit puts up joint venture IT service firm

IP Converge Data Center Corp., a wholly-owned subsidiary of publicly-listed IPVG Corp., has signed a memorandum of agreement with First Cagayan Leisure & Resorts Corp. to form a joint venture company — First Cagayan Converge Data Center Inc.

In a disclosure to the Philippine Stock Exchance, IPVG said the joint venture will provide IT services such as IP communication, co-location, bandwidth, disaster recovery services, software development, Internet merchant payment processing and payment solution and other value-added services to the licensed locators of First Cagayan, as well as to Cagayan Economic Zone Authority (CEZA).

The new company will invest in building, upgrading and maintaining the IP-communications infrastructure that connects CEZA to the global Internet. This includes fiber optic networks, wireless radio stations, telco-grade Internet data center, network operations center, and network hubs/access points.

Licensed locators of First Cagayan are predominantly foreign companies that have chosen to locate their back-end operations in CEZA. Such locators have voice, video and data requirements to connect their back-end operations in the Philippines to the host countries of their clientele.

The joint venture will be 60 percent owned by First Cagayan and 40 percent by IP-Converge. Both parties shall infuse the necessary capital to fund the required infrastructure requirements of CEZA and First Cagayan locators.

The company has allocated $3 million for short-term capital expenditures which will be financed by a combination of debt and equity.

"This joint-venture reflects First Cagayan’s commitment to providing world class communications services to licensed interactive gaming locators. With a next generation IP-network, CEZA is poised to attract and capture more international companies, " said Alfredo Benitez, chief executive officer of First Cagayan.

"We are extremely pleased with our partnership with First Cagayan. Through this partnership, we are able to participate in the growing communication requirements of the economic zone (CEZA), and play a key role in connecting the Philippines to the rest of the World. This is consistent with our vision of providing the Philippines with world class communications services," added Enrique Gonzalez, chairman of IP-Converge.