PhilWeb Corp., an online gaming company controlled by former trade minister Roberto Ongpin, sought Monday for a three-day trading suspension of its shares, citing “unverified material information” that affected its business.
PhilWeb asked for the trading suspension after its stock tumbled 22 percent Friday on reports that President Rodrigo Duterte wanted to stop online gambling in the country.
“In view of unverified material information affecting the business of PhilWeb Corp. that will materially affect the investing public, we hereby request for a trading suspension in PhilWeb shares from July 4 to 6 2016,” PhilWeb corporate information officer Raymund Aquino said in letter to PSE.
PhilWeb did not specify the unverified material information.
Aside from President Duterte’s pronouncement, concerns over possible non-renewal of PhilWeb’s contract with state-run Philippine Amusement and Gaming Corp. also contributed to investors’ anxiety.
PhilWeb’s contract with Pagcor is expected to expire on July 11, 2016.
PhilWeb operates a network of 268 Pagcor e-Games cafes with a total of 8,839 gaming terminals nationwide. Most of these e-Games are in the National Capital Region, including Quezon, Batangas and Balesin Island, which is owned by the Ongpin Group.
Most e-Games cafes operate 24 hours a day.
The steep decline in PhilWeb’s stock price is expected to affect the company’s plan to raise as much as P6 billion from the sale of treasury shares through a private placement.
PhilWeb announced last month it would make a private placement of up to 300 million shares at a discount to market, but at a price no less than P20 per share.
“The private placement will result in PhilWeb receiving cash and receivables of at least P6 billion. With this war chest, the company will have the ability to go on an aggressive expansion program,” PhilWeb said.
The actual price and payment terms, however, will be subject to the approval by PhilWeb’s board or executive committee.
The shares to be sold at the private placement are part of the 354.6 million shares currently in treasury which PhilWeb bought from Philippine Long Distance Telephone Co. in 2013 at an average price of P11.90, for a total value of P4.2 billion.