Ongpin-led ISM eyes new business following windfall from ETPI sale

MANILA, Philippines -  ISM Communications Corp., currently awash with cash following the sale of a portion of its stake in Eastern Telecom (ETPI) to San Miguel Corp. (SMC), is preparing for a new business direction which may include investing in new areas.

ISM chairman Roberto V. Ongpin said the new business direction will be revealed at a more appropriate time.

But he said they are currently in talks with a domestic company where ISM can invest in, although investing in a foreign firm is also a possibility.

The stockholders yesterday gave management the authority to deal with ISM’s remaining 37.7 percent stake in ETPI as well as its indirect stake in European firm Acentic, including a possible sale of some or all the shares in both ventures.

ISM president Eric Recto said the company will redeploy the cash to a venture which they believe will bring to the company and the shareholders the ability to realize better returns.

ISM currently has P1.2 billion in cash, part of which came from the P270 million in net revenues generated from the acquisition by SMC’s wholly-owned subsidiary Vega Telecom of AGM, which owns 40 percent of ETPI.

What remains with ISM is its 37.7 percent direct ownership in ETPI, which SMC is reportedly interested in. The book value of ISM’s remaining stake in ETPI is P1.14 billion.

Aside from a stake in ETPI, ISM also owns half of Host Union Intl Ltd of Hong Kong which invested in a 65 percent stake in Acentic, a European company that provides in-room entertainment.

Philweb owns the remaining 50 percent of Host Union.

The book value of ISM’s stake in Host Union and indirect stake in Acentic is about P660.4 million.

Recto said that they have changed the management of Acentic and expect that this year, the fruits of their efforts will be shown in the substantially improved financial performance of Acentic.

“All these available funds will allow us to fashion a new story for ISM,” Recto said.

He also pointed out that ISM was set up as an investment company and therefore, it is their duty to reinvest the cash at this point. “We are looking at good and profitable opportunities,” Recto revealed.

He added that declaring dividends at this point will only contribute to the inefficiency of ISM.