PhilWeb raising P5B to fund international expansion

MANILA, Philippines –  PhilWeb Corp. is raising up to P5 billion through the issuance of new shares to finance an aggressive international expansion and acquisition program.

The company’s shareholders approved yesterday the issuance of up to P5 billion worth of new primary shares, the details of which have yet to be worked out.

PhilWeb chairman Roberto Ongpin said they have received a proposal from UBS to undertake the fund-raising program overseas.

He revealed that for a few months now, they have been in talks with at least two major international and ‘extremely profitable’ companies in the gaming business, both of which have invited PhilWeb to make an investment in their respective companies.

“To take advantage of this opportunity, we could probably use part of the proceeds of the fund-raising exercise for the investment,” he said.

Part of the proceeds will also be used for international expansion. In Cambodia, PhilWeb Cambodia Ltd. has secured a 6/49 lotto license that will allow the company to engage in both mobile and kiosk-based gaming. PhilWeb is in partnership with 5-P Corp. of Cambodia for this venture.

Meanwhile, Ongpin said PhilWeb is about to get a license to open up PeGs Cafes or Internet cafes that offer online versions of various games of chance in Laos in partnership with the Simuong Group. In Guam, the company is looking at setting up Sweepstakes Cafes in partnership with the Calvo Group while in Nepal and Sri Lank, PhilWeb is looking at lottery and scratch cards together with the Chaudhauy Group.

In East Timor, he also revealed that they are still scouting for a partner also for the offering of lottery and scratch cards while in Palau, PhilWeb will be partnering with the Toribiong Group for Internet cafes also offering games of chance.

Ongpin said they expect to be very profitable in these neighboring countries. “Take Nepal which has just become a democracy. It has a population of 30 million but they have no lottery, no gaming, or lotto. Sri Lanka has a slightly larger population. Cambodia has 15 million. We are choosing countries that have no established lottery or gaming business,” he added.

Part of the proceeds from the new equity offering will also be used to finance local expansion. PhilWeb has just renewed its contract with the Philippine Amusement and Gaming Corp. (Pagcor) involving the so-called Pagcor e-Games cafes (PeGS Cafes) which are Pagcor-owned and operated Internet cafes in the Philippines that offer online games of chance.

Ongpin disclosed that last Dec. 17, PhilWeb renewed its contract with Pagcor, which among others allowed the former to establish a minimum of 100 new PeGS cafes every year. The contract is valid up to July 2016 and renewable after that.

There are currently 190 PeGS cafes nationwide, of which 177 are franchised and the rest company-owned. Four more have been added since the contract renewal.

The PhilWeb chairman said that of the 100 targetted for 2011, 83 are already in the pipeline and have been identified.