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MANILA, Philippines (UPDATED) – Businessman Roberto Ongpin failed to save listed gaming firm PhilWeb Corporation from shutting down its outlets, after the Philippine Amusement and Gaming Corporation (PAGCOR) stood pat on its decision not to renew its contract.
PhilWeb president Dennis Valdes said his firm will wind down its e-Games operations on Wednesday, August 10, leading to the closure of all its 286 outlets manned by over 5,000 employees.
Valdes clarified, however, that PhilWeb is only ending its services to PAGCOR.
“We’re not closing down. We’re winding down our services to PAGCOR. That’s separate from the closure of the company. We are a service provider to PAGCOR for the e-Games network,” Valdes said in an interview with GMA Network.
PAGCOR confirmed this in a statement, saying: “PhilWeb contract will expire on August 10, 2016. PAGCOR will not renew nor extend the contract.”
Trading suspension, new revenue streams
PhilWeb told the Philippine Stock Exchange (PSE) in a disclosure on Wednesday, August 10, that it has requested for a trading suspension in shares from August 10 to August 31 this year, “due to material uncertainties and unverified material information affecting” its business.
“This will ensure that PhilWeb shares are not being traded on an uninformed basis,” PhilWeb said in the regulatory filing. (READ: Ongpin’s PhilWeb seeks 3-day trading suspension)
In a separate interview, Valdes said that the PhilWeb board “will have to assess new revenue streams.”
This was after PhilWeb met with PAGCOR officials Tuesday, August 9, to appeal the decision not to renew the license, which was to expire the following day.
The decision of the government-owned and -controlled gaming corporation comes after President Rodrigo Duterte publicly threatened to “destroy oligarchs” like Ongpin.
In an attempt to save PhilWeb’s businesses, Ongpin and his daughter, Anna Bettina Ongpin, resigned last week. (READ: PhilWeb reveals ‘main reason’ behind Ongpin resignation)
In the past few weeks, PhilWeb has suffered from poor investor sentiment.
A day after Duterte’s threat against Ongpin, PhilWeb shares plunged by 36.88% to end at P8.95 each.
Shares of the listed firm further declined when PAGCOR announced that the non-renewal of PhilWeb’s contract.
On Monday, August 8, PhilWeb shares dipped further by 43.06% to P5.13 each, the lowest price it registered on the PSE since 2014.
For the past 14 years, PhilWeb has been listed on the PSE. It is also a service provider to the PAGCOR in the management of its e-Games network.
During this period, PhilWeb said it remitted over P14 billion to PAGCOR.
Aside from the revenue PAGCOR gets from PhilWeb, Valdes said in an earlier statement that not renewing its e-Games license would affect “over 1,500 stockholders who own shares in PhilWeb,” including foreign funds.
He pointed out that “the sudden closure of a publicly listed company may cause serious concerns to foreign investors” in general. – Rappler.com