IPVG shareholders agree to restructre company

Shareholders of local technology conglomerate IPVG Corp. agreed over the weekend to restructure the company by establishing a new private holding company for all its current assets and liabilities. Under the new plan, the 12 IPVG subsidiaries will be transferred to the still unnamed company, while publicly listed IPVG will be spun off as an operating company. IPVG operates a host of upstart technology firms in the country, including data center provider IP-Converge Data Center Corp. and online gaming provider IP E-Game Ventures Inc. IPVG said it will transfer 30 percent of the new company's shares to public shareholders, giving them equal amount of shares in the two companies. Enrique Gonzales, CEO of IPVG, said the new setup will allow the company to be valued much higher than their current market cap, and increase shareholder values. IPVG's current market cap is currently valued at P997 million as of end-June. "By replicating IPVG under a private scheme, we can properly value based on net asset value (NAV) method and we can tap private equity," Gonzales said. "We can increase our value just by doing this," he added. Plans for the public entity, on the other hand, are kept under wraps for now, but Gonzales said they will be injecting a new business into it. He refused to disclose, however, if the new business will still be in the technology sector. "There are a lot of potential businesses to inject there. I don't want to mention any sector-specific business, because that will limit us, but we're looking at many opportunities right now," he explained. Reason for restructuring Enriquez said the company's "very good" first-quarter performance is a sign that the company should ramp up its operations immediately, giving reason for the planned restructuring. In the first quarter of the year, IPVG posted a net income of P300 million, more than double its total net income for the entire 2010. Majority of the income, however, came from the company's non-recurring sale of network securities subsidiary, Prolexic Technologies Inc., to investment firm Kennet Partners in march. "It shows that our group is taking off, and a lot of the investments we've made over the last few years are now coming to fruition," Enriquez said. As a step forward following the restructuring, Enriquez said the company will take its consumer Internet businesses as its primary investment focus for growth. To date, two IPVG subsidiaries fall under such category: gaming arm IP E-Game Ventures Inc. and e-payments provider i-Pay Commerce Ventures Inc., an authorized Western Union agent for money transfer. Aside from operating its online gaming business, listed IP E-Games is also in charge of the company's sprawling network of Internet cafes around the country. Enriquez said the plan is to grow their Internet cafe network by acquiring other chains and individual shops around the country. IP E-Games has thus far acquired five major Internet cafe chains around the country, such as the brands Station 168 and iHooked, CyberOne Technology Corp., I.T. Log Park Inc., and Netopia operator Digital Paradise Inc., the largest Internet café chain in the country. This round of acquisitions has brought the total number of IP E-Games-operated shops in the country to about 200 in just a matter of a few years. Enriquez estimates that the company currently holds about 10 percent of the total number of seats in Internet cafes in the whole country. He said the company plans to expand its Internet cafe network to about 1,000 shops in the next three years. He added that the company's strategic acquisition of the Netopia brand has brought gains to the company's revenue. "We more than doubled our revenue because of that acquisition, on a full-year basis," he said. He added that the company is planning to tie up its two main consumer-financing businesses in the coming years, so a Western Union outlet located inside one of its Internet shops in the country may be in the offing. — VS, GMA News