Tech firm left with shell company after spin-off of assets

MANILA, Philippines — The technology firm IPVG Corp. has completed a restructuring program that spun off substantial assets into a new company, leaving the publicly listed shell company wide open for the infusion of “attractive” new ventures.

Industry sources said tycoon Enrique Razon Jr. was interested in buying the publicly listed shell company as vehicle for a “backdoor” listing of his private private interests, particularly an ongoing $1.3-billion integrated gaming and tourism project in Pagcor City by Manila Bay.

IPVG announced late Tuesday the completion of the sale of all or substantially all of its assets to a new company, IP Ventures Inc., pursuant to a restructuring plan approved by its shareholders last July. IP Ventures has exactly the same ownership structure as IPVG Corp., but it is not listed on the Philippine Stock Exchange

“With the completion of our restructuring, we are now prepared to realize two key benefits,” IPVG chief executive officer Enrique Gonzales said in a press statement. “Firstly we will be raising capital through IP Ventures and secondly, we shall be maximizing the value of our listed company through the injection of an attractive business asset. We are confident this shall further increase shareholder value.”

The aim of the restructuring is to increase shareholder value and generate cash for the company’s shareholders. “It will also allow the company to command a higher valuation and raise funds at better terms and conditions with leading private equity firms,” the statement said.

In accordance with the restructuring, IPVG’s minority shareholders will receive shares of the new company IP Ventures by way of donation from IPVG’s majority shareholders. These shares will be in the same proportion as their shares in IPVG.

Moving forward, IPVG sees the completion of this restructuring becoming yet another “stepping stone” for the publicly listed holding firm to “achieve its business and operational targets.”

Likewise in line with the IPVG restructuring, the board approved the impairment provisioning for two of IPVG’s assets, namely IP Contact Center Outsourcing andbRotherham Consultants Ltd., both of which have shut down operations. IPVG will write off roughly P300 million from the transfer of these assets to IP Ventures.

The IPVG board has also approved a capital call on all unpaid portions of previous subscription amounts.

IPVG invests both funding and management expertise into incubation and upstart technology businesses. It has two listed companies: data center IP Converge Data Center (which trades under the Philippine Stock Exchange ticker CLOUD) and IP e-Games Ventures (ticker EG) which currently operates two of the largest Internet café chains in the country, Netopia and CyBr.

The holding firm has also forged partnerships with the likes of Hong Kong telecom giant PCCW Teleservices (for its BPO operations) and US-based private equity firm Kennet Partners (for its network security business).