IP E-Game Ventures Inc. is divesting from its internet cafe business.
IP E-Game said in a disclosure to the stock exchange it signed an agreement to transfer its 48.36-percent stake in Digital Paradise Inc. (DPI), which operates the Netopia internet cafe, to Y-FI Business Solutions Inc. for P62.93 million.
Y-FI Business is also owned by IP-E-Game president and chairman Jaime Enrique Gonzalez.
The divestment is part of the company’s move to sell or divest from non-core assets.
IP E-Game said the internet cafe business in the last few years had been in a state of steady decline due to the increase in locations that offer free Wi-Fi, proliferation of portable gaming devices and the shift in the consumer use of mobile devices as a result of an improving economy.
The company said these factors allowed more people to acquire mobile devices and technological innovations that increased consumer dependence on mobile devices.
“All this has caused a significant reduction in the demand for internet cafes, and a downward trend in DPI’s sales, transactions per store and number of stores—all of which justify the issuer’s exit from this industry,” the company said.
DPI at its peak in 2006 operated almost 180 internet cafes across the Philippines. By the fourth quarter of 2018, DPI was operating just 14 internet cafes.
As a result, DPI posted a consolidated net loss of P43 million in 2017 from P4 million in 2016.
“If the issuer passed up the opportunity to divest its shares of DPI, there would have been a stronger possibility that there would have been no willing buyer of those shares considering the negative trends in DPI’s revenues and income,” IP E-Game said.
IP E-Game in 2011 acquired DPI from PLDT Inc.’s wholly owned subsidiary ePLDT Inc.