After spinning off its gaming services unit HatchAsia Inc., technology provider DFNN Inc. plans to declare some shares as property dividends and list this affiliate on the local stock exchange by way of introduction early next year.
HatchAsia’s listing by way of introduction will unlock the value of shares in this company, DFNN president and chief executive officer Ramon Garcia said during DFNN’s stockholders meeting on Friday.
“The intention is to take HatchAsia listed by way of introduction because we have now wiped out our deficit (DFNN),” Garcia said in an interview with Inquirer after the stockholders meeting. “We have engaged China Bank (Capital) to manage the issuance.”
Now that DFNN has wiped out its deficit, the group is in a position to realize earnings and declare dividends, he said.
The goal is for the listing by introduction to happen by the second quarter of 2018, HatchAsia chief executive officer Ron Arambulo said in an interview.
Listing by way of introduction means a company will list on the stock exchange without initial public offering. However, HatchAsia will have public ownership as DFNN intends to declare some of its shares as dividends, which means DFNN’s investors will receive shares of HatchAsia on a pro-rata basis.
But within a year after listing by introduction, HatchAsia will have to comply with the requirement to make a public offering of shares.
HatchAsia provides backroom services to gaming firms. It has tied up with a foreign group that provides business process outsourcing (BPO) services to the gaming industry, including call center as well as software, chat and other support services.
“It’s a vertical within the gaming industry. There are a number of other listed gaming companies that are BPO-centric—so they are not actually operating gaming. They are doing support services. Some are listed on London Stock Exchange; some are listed on Toronto Stock Exchange. Think of a call center/BPO, back office but operating locally,” Garcia said.
Philippine Amusement & Gaming Corp. (Pagcor)’s licensees for Philippine offshore gaming operators (POGOs) are among HatchAsia’s potential clients, Garcia added.
“Under the new POGO regime of Pagcor, we’re studying that very well. That will allow us to do a lot of service and support for offshore gaming,” Arambulo said.
“They are spinning us off because we have the ability of bringing another market,” he added.
In the past year, DFNN has reduced its stake in HatchAsia to 34.77 percent from 59.44 percent. However, some DFNN directors like Garcia own direct shares in the unit, which means around 50 percent of voting block is still within DFNN. The remaining 50 percent stake is held by local investors who have been instrumental in boosting the BPO business and the gaming technology expertise, reviving HatchAsia when these investors came in 2014, Arambulo said. “It’s a turnaround story,” he noted.
Formerly hatchasia.com Inc., HatchAsia started as an incubator business in 2000 but has since then expanded into other IT services and training businesses. It is now working with the premier i-gaming license holder in the Philippines. It also services a growing list of clients that require design, coding and testing work as well as payments processing services for several Asian clients and are working on expanding capability for other markets and regulatory environments.