Ongpin to sell his entire 53.76% stake in PhilWeb
MANILA, Philippines (UPDATED) – Businessman and former trade minister Roberto Ongpin is selling his entire 53.76% stake in PhilWeb Corporation through an open and public bidding, in his last attempt to save the listed gaming firm and its over 5,000 employees.
"In a final effort to save the jobs of thousands of innocent people who will be affected, I will sell my entire stake in PhilWeb. I hereby announce that I have decided to conduct an open auction for all these shares as of today," Ongpin announced in an emergency stockholders' meeting held in Makati City on Wednesday, August 10.
Ongpin currently holds 771.75 million shares in PhilWeb, amounting to 53.76% of the company's total outstanding shares. (READ: PhilWeb to close e-Games outlets despite Ongpin resignation)
According to Ongpin, the auction will start Wednesday, August 10 and will end on August 17.
"This auction is open to every financially capable person or entity who wishes to submit a bid, and I will sell my shares to the highest bidder," he said.
This "final effort" to save the firm, its 5,000 employees, and stockholders comes as the Philippine Amusement and Gaming Corporation (PAGCOR) stands pat on its decision not to renew PhilWeb's contract even after Ongpin's resignation.
Six days ago, Ongpin resigned as chairman and director of PhilWeb, after President Rodrigo Duterte publicly threatened to "destroy" the businessman and other "oligarchs."
Despite his resignation, PAGCOR decided not to renew PhilWeb's contract, which expired on August 10.
'Lightning bolt aimed at me'
"I had hoped that with my resignation, PAGCOR would be able to renew the contract, and thus save the thousands of people," Ongpin said during the meeting.
"Unfortunately, it was not to be, and PAGCOR has officially notified PhilWeb that its license will not be renewed and it must cease operations as of midnight tonight."
The former trade minister said PhilWeb and its stakeholders were just caught up in the mess.
"The lightning bolt was meant for me alone. PhilWeb, its employees, and shareholders are all innocent bystanders," Ongpin added. (READ: PhilWeb reveals 'main reason' behind Ongpin resignation)
The listed gaming company said it has about 1,500 stockholders, 286 e-Games outlets, and about 5,000 employees.
PhilWeb to apply for new license
But for PhilWeb president Dennis Valdes, the company will not lay off any employee, as it is looking for a fresh start.
Valdes said PhilWeb will apply for a new intellectual property license agreement with PAGCOR "within the next few weeks."
"Once we secure a new license from PAGCOR, we will restart PhilWeb, which will start very soon," Valdes said during the meeting.
In the meantime, the Philippine Stock Exchange (PSE) has granted PhilWeb's request for a trading suspension from August 10 to August 24, "due to material uncertainties."
Once PhilWeb secures a new PAGCOR contract, Valdes said his firm will ask the PSE to lift the suspension.
Worst case scenario
"If there are sticky matters, it should drag on for quite a while. But I am hopeful that we will get restarted fairly quickly – a week or two. By that time, we believe that if we're lucky we should be all done. We can ask the PSE to lift suspension," Valdes said.
Should the company fail to secure a new contract or Ongpin is unable to sell his stake, the former PhilWeb chairman said "the board will have to decide how to move forward."
"I want to facilitate the renewal of PhilWeb's license by stepping out of the way. The President, he doesn't like me. So I am exiting," Ongpin added.
According to Valdes, PhilWeb's only source of income is the 286 e-Games outlets.
Starting Thursday, August 11, Valdes said PhilWeb will be foregoing P4.47 million in gross gaming revenue a day, once it stops the operations of its gaming outlets.
"I think we're now averaging about P15 million a day in gross gaming revenue, so 29.8% of that is PhilWeb; while 40% of it goes to PAGCOR," he explained.
The cease of PhilWeb's e-Games operation will mean P6 million foregone revenue a day for PAGCOR, Valdes added.
"My personal thought is provided you have the hope of operating this business, because it is a great business, you should continue to operate, so we will hold off as long as there is a possibility of getting that license," Valdes said.
For the past 14 years, PhilWeb has been listed on the PSE, serving as a service provider to PAGCOR in the management of its e-Games network. – Rappler.com