PLDT unit sells 27% stake in Philweb

MANILA, Philippines - ePLDT Inc., a wholly-owned subsidiary of dominant carrier Philippine Long Distance Telephone Co., is selling its 27 percent stake in Philweb Corp. of businessman Roberto Ongpin for a total consideration of about P4.257 billion.

In a joint statement submitted to the Philippine Stock Exchange (PSE), ePLDT and Philweb said they inked the share purchase agreement yesterday.

The transaction covers 397.892 million shares or about 27 percent of the total outstanding capital of Philweb. It would be undertaken in four tranches to be completed by the end of 2013. The first transaction is expected to be consummated on Friday at P10.7 per share. The second tranche would also be priced at P10.7 per Philweb share while the third and fourth transactions would be priced at the same base price of P10.7 but with an adjustment of three percent interest per annum.

Philweb corporate information officer Cliburn Anthony Orbe told the stock exchange that the company has enough cash to acquire the shares, resulting in higher earnings per share.

“Philweb, on the other hand, was happy to acquire the ePLDT stake because its cash flow was sufficient to pay for its acquired shares and would therefore result in higher earnings per share for the company by reducing the outstanding share by approximately 27 percent,” Orbe stressed.

ePLDT invested over P500 million to acquire a 20 percent stake in Philweb in May 2006.

ePLDT corporate secretary Ma. Lourdes Rausa-Chan told the PSE that the company wanted to cash in on its investments and thus decided to unload its stake in Philweb.

“Having made over 660 percent return on its original investment in six years, ePLDT wanted to realize its profits,” Chan said.

Both companies, however, pledged to continue working with each other on various mutually beneficial projects.

Philweb is primarily engaged in Internet-based gaming, through its appointment as principal technology service provider under the marketing consultancy agreement for Internet sports betting and Internet casino with the state-run Philippine Amusement and Gaming Corp. (Pagcor).