IPVG raises P352M via private placement

Publicly-listed information and communication technology (ICT) conglomerate IPVG Corp.  has raised P352 million in fresh capital through a private placement of shares, strengthening the company’s plans to embark on a regional expansion through strategic acquisitions.

“The new funds will be used to finance IPVG’s acquisition roadmap and comes at a time when many companies worldwide are constrained to raise funds from institutional investors,” IPVG president Enrique Gonzalez said yesterday.

IPVG sold 44 million common shares from its authorized and unissued capital stock at P8 per share to foreign and local institutional groups consisting of  Banco de Oro-EPCI Inc. (Trust Department), ING Bank N.V., Manila Branch (Trust Department), Abacus Securities Corp. and The Philippine Star Group (Pilipino Star Ngayon Inc., Pilipino Star Printing Co.Inc.)

The fresh capital is in addition to an earlier investment of P250 million by ING Bank N.V, Manila Branch (Trust Department) last month.

“This recent investment by major financial institutions into IPVG is a vote of confidence in our company. With this growth capital in our war chest, we are now well positioned to proceed with strategic acquisitions across all of our businesses. IPVG also plans to raise debt financing to maintain a healthy debt-to-equity ratio, thereby maximizing the return on shareholders’ equity.” Gonzalez said.

He said the company’s management has outlined plans to grow IPVG’s business through a series of strategic acquisitions that will take IPVG regional. “With over P700 million  in equity funds which will be supplemented with debt financing, the company now has the resources to implement its acquisition road map,” Gonzalez said.

He emphasized the significance of the investments amid massive global corrections in the equity markets.

“Although there is a global correction in the equity markets across the board, there is definitely a flight to quality. Overly expensive stocks or stocks with poor fundamentals are being sold, excess fat is being shed.  While some investors are parking their cash and taking a ‘wait and see attitude’, others are seeing this recent correction as a good opportunity to buy quality issues which have attractive valuations,” Gonzalez said.

“Investors are seeing our strong fundamentals and the attractiveness of our business model which can scale up rapidly and provide our shareholders significant upside,” he added.

“It is advantageous to be well funded in a volatile equity environment. It allows the company to focus on operational implementation, and well funded companies can take advantage of cheaper valuations when looking at acquisitions. Volatility usually translates to a ‘buyers market.’ With these newly raised funds, IPVG can work this to its advantage. IPVG’s fundamentals are now stronger than ever, and we will focus on taking this company to the next level,” Gonzalez emphasized.

At the same time, IPVG announced it is building a chain of Internet cafes and network gaming centers throughout the country  to compete with Netopia, which is controlled by telecommunications giant Philippine Long Distance Telephone Co. (PLDT).

This new venture is in partnership with Sabinclub.com., an information technology-based firm offering web-related and consultancy services.

Incorporated in October 2000, Sabinclub.com employs resources and technology coming from Korea, one of the most powerful and advanced countries in the field of ICT.

IPVG and Sabin.club.com are planning to put up about 100 i-Hooked Internet cafés designed after Korea’s PC Bang.

“The Internet cafe is a critical component of the Internet industry. IPVG will invest in this sector because we want to help the industry develop and grow, ”  said Gonzalez.

The group intends to open a flagship branch in Makati which will have around 100 computers with the succeeding outlets in the area having more than 50 units per branch in the next two years.

“We hope to see more than 100 branches in two years’ time near the big schools and in commercial areas all over the country,”  he said.

Two i-Hooked branches have already been set up, one located along Katipunan Avenue in Quezon City and the other along Vito Cruz, near De La Salle University, targeting students, residents and other consumers.

To distinguish itself from other Internet cafes, i-Hooked intends to provide the fastest Internet connection with a high-end computer in its target areas, as well as well-trained service staff,” said Sabin.club.com president Dong Hun Lee.

Internet rates at i-Hooked will be flexible, ranging from P25 to P40  per hour to adapt to a particular market’s purchasing capability.