Philippine President Rodrigo Duterte’s war on eGame cafés has proved costly for Philippine-based gaming technology provider PhilWeb Corp., latest data showed.
In a regulatory filing, PhilWeb reported a 62.8 percent drop in its net income to P229 million (US$4.59 million) in the third quarter of 2016 as a result of the closure of its e-Game cafes following the non-renewal of its gaming license.
Third-quarter revenues also declined 16.34 percent to P1.02 billion (US$ 20.43 million).
PhilWeb has winded up its Philippine operations in August after the local regulator confirmed that the company’s operating license wouldn’t be renewed. Prior to the expiration of its license, PhilWeb had a services contract to supply gambling terminal software to 286 PAGCOR-licensed eGames cafes, which offer a variety of slots, video poker and other digital casino gaming options.
The non-renewal of the gaming license followed the directive of President Rodrigo Duterte to stop the proliferation of online gambling operations across the country. Billionaire Roberto Ongpin has stepped down from his post and divested his shares after he was singled out by Philippine President Rodrigo Duterte as an oligarch who must be destroyed.
Ongpin was replaced by businessman Gregorio Araneta, husband of Irene Marcos, who is the sister of Vice President candidate Ferdinand “Bong-Bong” Marcos, Jr. Duterte has explicitly said that there is a tight bond between his family and that of former President Marcos.
Araneta has recently announced that securing a permit from state regulator Philippine Amusement and Gaming Corp. (PAGCOR) is “already in progress,” with the process expected to be completed before the end of 2016.
Meanwhile, the Securities and Exchange Commission asked PhilWeb to disclose its tender offer plans for minority investors.
In a letter, SEC director Vicente Graciano Felizmenio ordered the online gambling firm to furnish them with a specific timetable on a tender offer after closing the deal with Araneta.
Under the Securities Regulation Code, an individual or group acquiring 35 percent of the outstanding voting shares, or such securities sufficient to gain control of the board of a listed company, is required to make a tender offer to minority shareholders.
Araneta has agreed to acquire resigned PhilWeb chairman Robert Ongpin’s 53.76 percent stake comprising of 771,651,896 shares in PhilWeb, according to a disclosure to the Philippine Stock Exchange. The acquisition of the entire shares of Ongpin has a tag price of PHP2.01 billion (US$41.56 million) or PHP2.60 (US$0.0539) per share and will be done in two tranches.
Pursuant to the sale and purchase agreement, Ongpin will first complete the disposal of 653,151,896 shares in favor of Gregorio Araneta through a special block sale pending approval by the bourse.
Ongpin will transfer the remaining 118,500,000 shares upon their registration with the PSE. This tranche comprises partially paid shares, which have been fully settled but remained unregistered with the bourse.