Premiere lends P30M to gaming firm

Listed film outpit Premiere Entertainment Productions Inc. (PEP) has agreed to extend a P30-million loan to local gaming firm Digiwave Solutions Inc., a company set to be acquired by PEP.

In a disclosure to the Philippine Stock Exchange, PEP said the amount will be used for the expansion and operational requirements of Digiwave, which is engaged in the business of software development and provision for leisure and gaming purposes.

“PEP is in the process of finalizing its acquisition of Digiwave as a wholly-owned subsidiary which was presented and approved by stockholders of the company during its annual meeting held last May 16, 2008,” PEP said.

Under the agreement,  PEP will issue 1.003 billion shares to Digiwave shareholders in exchange for 100 percent of the gaming company.

Digiwave shareholders — S Capital Corp., Jun Ku Lee, Microgames Co. Ltd., Star International Ltd., and OFT Lending Inc. — will infuse up to P200 million in fresh capital into PEP.

The share swap is anchored on Digiwave’s projected net income for 2008 of P125.5 million, given a price earnings multiple of eight times.

With the acquisition of Digiwave, PEP will be renamed Premiere Entertainment Philippines Inc. to reflect its focus on gaming, although it said it will continue to produce new films.

The acquisition of Digiwave will mark PEP’s entry into the online casino gaming industry which is currently the fastest growing business in the world, registering over $8 billion to $9 billion in revenues in 2006.

Last year, the global online gaming business was estimated to record $6 billion in revenues and is expected to grow further to $12 billion by 2010, driven by the increase in broadband households, higher PC penetration and more connected console video game systems.

Founded on Aug. 9, 2006, Digiwave’s goal is to establish itself as the market leader in Internet gaming software in the Philippines and eventually compete in the international arena anchored on its proven expertise, experience and innovations in interactive gaming and entertainment.