IPVG to transfer assets to new private firm

While its subsidiaries are going public, tech conglomerate IPVG is doing the opposite — it is going back to being a private company.

In a press briefing Friday, the Yuchengco-led firm announced that it will take on a new business plan that will transfer all assets and liabilities of IPVG to a new private holding company, which will retain the same technology conglomerate ownership structure.

The purpose of the restructuring plan is to increase shareholder value and raise more cash for IPVG, the company said.

IPVG CEO Enrique Gonzalez justified the move by saying that the current IPVG share price does not reflect the value of the company.

“We intend to replicate IPVG under a private scheme, so we can properly value based on net asset value method and we can tap private equity. The new plan will position us better to fully unlock and realize our true values at the holding company level,” Gonzales said.

“Our group has evolved much over the years. In the beginning, we incubated all these start-up businesses under IPVG. It made sense to bulk up and raise money at the parent level during those early years. Now that we have grown into a full-blown tech conglomerate, our subsidiaries are either public or on the way to going public.

“Our philosophy has changed. We are now focused on taking the operating companies public. This changes the role of our parent or investment holding company quite a bit, hence the new plan,” Gonzalez said.

IPVG operates 12 subsidiary companies in the country with about 3,000 employees. In the group of 12 companies, 3 are public, and another few are in joint ventures with large organizations including PCCW Teleservices, GMA7, and Kennet Partners (USA), Western Union, Salesforce.com, and Google Enterprise Solutions.

In the first quarter of 2011, IPVG generated over P300 million in net income, surpassing its 2010 performance of P145 million.

IPVG acquired Netopia chain of internet cafes in the country, and secured agreements to acquire the CyBr and I.T. log chains. IPVG owns the Station 168 and i-Hooked barnds of i-cafes, bringing its total retail stores to about 200 establishments nationwide with approximately 8,000 seats, which make up almost 10 percent of total seats in the Philippines.

IPVG’s remittance business under the Western Union brand has reached 407 outlets as of July 2, 2011.

“When we look at our retail business, we want to become the dominant player in our category. We think in thousands not hundreds over the next three years,” Gonzales said.