Businessman Roberto V. Ongpin has decided to sell his 53.76-percent stake in gaming technology provider Philweb Corp., after the state-owned Philippine Amusement & Gaming Corp. (Pagcor) rejected proposals to preserve the e-Games network.
In a letter to the Philweb board and employees dated Sept. 4, Ongpin said: “It is with deep regret that I am hereby informing you that I have decided to divest of my entire holdings in Philweb Corp.”
After resigning as chair of Philweb and making several offers to Pagcor—all of which had been either rejected or ignored— Ongpin said it had become obvious to him that as long as he remains a shareholder of Philweb, there’s no chance that Philweb will get a favorable response from Pagcor.
“Thus, in an effort to save the company, its employees and the some 5,000 employees of the e-Games operators, I have come to the decision to divest of my entire holdings,” he said.
From the proceeds of this divestment, Ongpin said he intended to donate P1 billion toward the government’s drug rehabilitation program, which incidentally was the same amount that San Miguel Corp. had pledged to donate for this program.
“It is heartbreaking for me to in effect abandon Philweb and all of its directors and employees who have, over the past 16 years, helped me grow it to be a successful and profitable enterprise. Regrettably, it appears that I have no other choice but to totally exit from the company for it to have a chance to survive,” Ongpin said.
Philweb is currently valued by the market at P9.2 billion based on Monday’s closing price of P6.72 per share, up by 14.87 percent. This puts the current market value of Ongpin’s interest in the company at around P4.94 billion.
But Ongpin earlier argued that the correct value of his stake should be P20 billion, in reference to his pro-rated share of Philweb’s market capitalization before Duterte’s pronouncements against Ongpin and Pagcor’s decision not to renew the license to service the network of e-Games nationwide.
Some 6,000 individuals and their families relied on the Pagcor’s network of 286 e-Games outlets across the country which was operated by Philweb under a service agreement that lapsed on Aug. 10. These are internet cafes exclusively dedicated to casino games including baccarat and blackjack.
Ongpin earlier wanted to sell his controlling stake in Philweb to the highest bidder but gave a short timeline to conduct the sale.
The sale was scrapped amid uncertainties on whether Pagcor would renew Philweb’s license to service the e-Games network after his exit.
He then offered to donate his 49 percent stake in Philweb to Pagcor itself and a 4.7 percent stake to the Ateneo de Manila University JVO Scholarship Fund (named after his late brother Jaime V. Ongpin).
Philweb itself, on the other hand, proposed to Pagcor a mobile phone-based lottery platform that is seen to generate P50 to P100 billion in potential annual revenues. This was pitched as a way to compensate for revenues to be foregone from the scrapping of a nationwide network of e-Games.