PhilWeb group and gaming tech provider JKS Tech agree to cross-equity deal

PhilWeb Corp, a Philippine-listed business-to-business (B2B) services provider for the country’s online gaming sector, and its wholly-owned subsidiary PhilWeb Capital Corp have agreed to invest an aggregate of nearly PHP4.23 billion (US$67.6 million) in JKS Tech Solutions Inc, a gaming system administrator accredited by the nation’s casino regulator. PhilWeb said in a Monday filing that it had subscribed to 3.41 million Common B shares in JKS Tech at PHP394 per share, representing an investment of approximately PHP1.34 billion. In a separate Monday filing, PhilWeb said JKS Tech had agreed to acquire approximately 81.38 million PhilWeb treasury shares at PHP16.50 each, for an aggregate of about PHP1.34 billion. The shares represent approximately 4.85 percent of PhilWeb’s issued and outstanding stock. The amount to be paid by JKS Tech for the PhilWeb treasury shares is approximately equal to the PHP1.34-billion direct investment that PhilWeb itself is making in JKS Tech. In addition, PhilWeb Capital is to subscribe to 7.32 million Common B shares of JKS Tech, also at PHP394, for an aggregate of PHP2.88 billion. Combined, the PhilWeb and PhilWeb Capital subscriptions amount approximately to 10.73 million JKS Tech shares, per the update. JKS Tech is described by PhilWeb as a Philippines-based B2B technology, platform and digital infrastructure company serving licensed mid-market operators in the digital entertainment sector. The Philippine Amusement and Gaming Corp (Pagcor), the country’s gaming regulator, lists JKS Tech as an accredited gaming system administrator (GSA) for the Epic Game brand. Its approved game offerings include traditional and electronic bingo, electronic casino games, sports betting, specialty games and numeric games, according to Pagcor’s data. The Common B shares to be acquired by PhilWeb and its subsidiary are to be issued from a proposed increase in JKS Tech’s authorised capital stock. The issuance remains subject to approval by JKS Tech shareholders and the Philippines’ Securities and Exchange Commission, as well as other applicable regulatory requirements, according to Monday’s filing. PhilWeb is to pay PHP335.70 million of its direct subscription at the first closing, with the remaining PHP1.01 billion payable subsequently. PhilWeb Capital is to pay PHP180.21 million at the first closing and the remaining PHP2.70 billion thereafter. The Philippine Stock Exchange has suspended trading in PhilWeb shares from Tuesday in relation to the JKS Tech investment, pending submission of additional information required under rules covering substantial acquisitions and reverse takeovers, according to local media reports. The JKS Tech deal follows a PHP2.03-billion investment in PhilWeb by businessman Lance Gokongwei. Mr Gokongwei acquired nearly 159.53 million PhilWeb common shares in late August and was subsequently named chairman of the company. The businessman’s investment had been announced in June and was described by PhilWeb as intended to strengthen its capital base and provide funding for expansion opportunities and investments.