By: Paolo G. Montecillo (Philippine Daily Inquirer)

Listed IPVG Corp. has spun off its operating subsidiaries as the holding company takes a different direction, seeking new investors that can bankroll ventures into new and more profitable industries.

The subsidiaries, including IP E-Games Ventures and IP Converge Data Center, will be operating under a new private company. Shareholders of IPVG will also be given shares in the new holding firm.

“The purpose of the restructuring plan is to increase shareholder value and raise cash for the group,” IPVG president and CEO Enrique Y. Gonzales said in a statement. “At present, IPVG’s current share price is not reflective of the underlying value of the company,” Gonzales said.

By spinning off its units, IPVG will be able to take in new investors who may not necessarily be willing to infuse cash into the subsidiaries.

The restructuring plan was approved by shareholders at their annual meeting last Friday.

“We will find a way to monetize our listed shell. This restructuring will make us more attractive to private equity players out there,” Gonzales told reporters after the stockholders’ meeting.

Gonzales was mum on the nature of the new investments, saying the company had several options and had been in talks with several groups.

In the meantime, Gonzales said the company would also continue to grow its operating units.

The strongest performer for the company so far this year, he said, was IP E-Games. The firm’s revenue has been boosted by its recent acquisition of Internet café chains. “We’re very focused on growing our consumer Internet business. That’s our investment focus. We believe the consumer Internet sector is going to grow by leaps and bounds over the next few years,” Gonzales said.

He said Internet cafes remained one of the main avenues for Filipinos going online, adding that this was the way for over 70 percent of the country’s users access the Internet.

He said IP E-Games would conduct its IPO before the end of this year, listing at least 20 percent of the company’s outstanding shares. IP E-Games currently has a market capitalization of P2.9 billion.

Makati, Philippines; 1 July 2011 – Shareholders of publicly listed technology conglomerate, IPVG Corp. (PSE: IP), approved today a new corporate restructuring plan for the Company. In particular, the shareholders approved the sale of all assets and liabilities of IPVG to a new private company, having the exact same shareholding structure of IPVG, and the delegation to the board for the mechanics of the restructuring. Essentially, the aim of the restructuring plan is to increase shareholder value and potentially generate cash for the company’s shareholders.

It is the firm belief of the board of directors that a private holding company with the unique investment portfolio of IPVG can command superior valuations versus its current market capitalization. This restructuring exercise will allow IPVG to command a higher valuation and raise funds at better terms and conditions with leading private equity firms.

Since its inception in 2005, IPVG has significantly grown from a company of roughly 30 employees to over 2,000 across all subsidiaries. Over the years, the Company has been at the forefront of development in the IT sector, notably in following industries: BPO, Internet Security, Data Centers, Online Gaming, and Technology-based Payment Solutions. The Company has set up call centers in the Philippines, U.S. & Panama, owns a leading network security (Distributed Denial of Service) company, operates a leading data center business (IP Converge Data Center, Inc.) and has established a top online gaming business (IP E-Game Ventures Inc.).

In 2010, the Company listed two of its subsidiaries: IP E-Games (PSE: EG) and IP-Converge (PSE: CLOUD), paving the way for further growth opportunities. Currently, IP E-Games has about 12 million registered users and now owns 3 Internet café chains: Netopia, iHooked and Station 168. E-Games has also signed agreements in line with the acquisition of two more i-café brands, namely CyBr and I.T. Log Park. IT&T subsidiary, IP Converge on the other hand, is presently running at 95% utilization in its main data center in RCBC Plaza, and is building out its second data center site. In the last year, I-Pay Commerce Ventures, the Company’s payment solutions subsidiary, was also appointed as Western Union’s newest direct agent to offer money transfer and foreign exchange services.

This year, IPVG has already achieved several milestones. First quarter earnings of P300 million represent the highest quarterly performance ever for the Group. A series of significant transactions including: the acquisition of Netopia, the number one Internet cafe chain in the country, and the sale of its majority stake in its network securities subsidiary, Prolexic Technologies Inc., are only a few examples of how the Group is poised to reach new heights.

IPVG CEO, Enrique Gonzalez states, “The restructuring is in line with the next evolution of the Group where it believes the operating companies that have reached critical mass can pursue public listing, and holding non-operating companies should be privatized. This restructuring plan can be seen as yet another opportunity for the Company to achieve its business and operational targets."