BUSINESSMAN Gregorio Araneta III expects to fully take over PhilWeb Corp. and secure a license from the Philippine Amusement and Gaming Corp. (Pagcor) before the year ends so that the company can restart operations, saying that talks with the Securities and Exchange Commission (SEC) and gaming regulator are already underway.
Araneta, who is the new chairman of PhilWeb, said over the weekend that securing a Pagcor permit was “already in progress” and is expected to be completed before the end of the year.
He said that once the license is in place, PhilWeb will immediately re-operate the 286 existing e-Games outlets of Pagcor, putting its 5,000 employees and operators back to work.
“Yes [we’ll immediately re-operate] because these operators, they’re losing money. About 5,000 people are expecting this. I told Pagcor, I’m not the one who’s hurting. The business is there, the longer you keep us closed, the harder it would be for the operators, there will be lesser revenues,” Araneta said.
“Anyway, bulk of the revenues goes to Pagcor. They take up the bulk, we [in PhilWeb]only get little,” he added.
Pagcor takes up 40.2 percent of gaming revenues from e-Games operations while 28 percent goes to operators, 2 percent to the marketers, and only 29 percent goes to PhilWeb.
Araneta, through his firm Gregorio Araneta Inc. (GAI), is still in the process of acquiring Roberto V. Ongpin’s 771.651 million PhilWeb shares, equivalent to a 53.76 percent stake, for P2.60 per share or a total transaction value of P2 billion.
Ongpin had sold his shares PhilWeb to Araneta so that the company could immediately secure a new license with Pagcor under a new chairman. PhilWeb provides the technology system to run Pagcor’s 286 e-Games outlets.
Ongpin resigned from PhilWeb and divested his shares after being tagged by President Rodrigo Duterte in early August as an oligarch who must be destroyed.
GAI has requested the SEC to allow them to go ahead with the block sale between Ongpin and Araneta before the mandatory tender offer, citing that no shareholder would be willing to tender their shares at P2.60 when they can dispose the shares at the market anytime at the prevailing market price of P9 or better.
The SEC’s only concern is that there is no precedent with this kind of arrangement as corporate laws require a tender offer to come first before a transaction that would result in drastic changes to equity structure or shareholder control.
“We already gave them precedent. PBCom [Philippine Bank of Communications], before Lucio Co stepped in. That’s the precedent…I think [the SEC]already elevated this to another group, so there should be no other reason [for delay],” Araneta said, adding that he expects a decision from the SEC decision within the month.
Araneta said he is considering a major expansion program for PhilWeb after the current issues are settled.
Through its e-Games outlets, PhilWeb employs 700 personnel and 5,000 others who are e-Games operators. Operating for 14 years as a service provider for the e-Games outlets, PhilWeb has remitted over P14 billion to Pagcor, which the gaming regulator uses for its pro-poor programs.
In 2015, PhilWeb remitted more than P2.1 billion to the gaming regulator and also paid over P280 million in corporate income tax, VAT [value added tax]and other taxes.