Cebu-based property group takes over IPVG unit

MANILA, Philippines - Majority shareholders of IP Ventures Inc. have sold 79.507 percent of listed technology firm IP Converge Data Center Inc. (Cloud) to Cebu-based 8990 Group of Companies, one of the leading low-cost housing developers in Visayas and Mindanao.

The selling shareholders are expected to receive P168 million from the divestment of 176.4 million shares in Cloud at P0.9524 apiece.

The transaction will result in 8990, owned by Filipino-Chinese businessman Luis Yu Jr. and Mariano Martinez Jr., gaining backdoor listing on the stock exchange.

The buyers will conduct a mandatory tender offer for the remaining 20 percent of Cloud at the same price per share pursuant to the requirement for purchases involving 35 percent of the outstanding capital of a listed corporation.

The 8990 Group is a fast-growing real estate firm with over 15 projects simultaneously being developed in Cebu, Davao, Iloilo, Clark, Pampanga and other major destinations in the country.

Apart from housing, the 8990 Group is also engaged in resort and hotel development.

IP Ventures chief executive officer Enrique Gonzalez said the selling shareholders have yet to decide what to do with the sales proceeds.

Gonzalez said the 8990 Group is infusing over P7 billion in real estate assets into Cloud.

In addition, Gonzalez said the transaction is expected to result in historical highs both in terms of revenues and net earnings of Cloud.

The 8990 Group is eyeing a net income of at least P500 million this year. Its asset base is likewise forecast to exceed P7.3 billion in 2012.

Cloud fell 24 percent yesterday to close at P3.26 from P4.29 Monday.

IPVG has transferred all its assets to IP Ventures as part of its restructuring program. This restructuring resulted in IPVG becoming a shell company, which can house other investments and businesses in the future.

IPVG earlier announced plans to construct a $250-million mineral refinery in the Philippines in partnership with Canadian firm REC. The plant, which will be built through affiliate New Wave Resources, will produce out 3,000 metric tons of refined mineral by 2015. The finished product is used in several industries including high technology applications and green technology.

Under the deal, REC will build the refinery and sell the majority of refined product through long-term off-take contracts.

IPVG intends to export most of its finished product to countries such as Japan, Korea, and the US and Europe, where the product is in high demand.

The restructuring also resulted in the group entering the coffee business. IP Ventures signed a franchise agreement with Viet Thai International Joint Stock Co. to bring Vietnamese coffee shop chain Highlands Coffee to the Philippines.