XURPAS Inc., a once high-flying technology firm that took the local stock market by storm when it listed, has entered into corporate restructuring, dissolving Xeleb Inc., while selling back Yondu Inc. to Globe Telecom Inc. for almost half the price.
In its separate disclosures, Globe, the country’s second-largest mobile phone company, said it bought back its 51-percent stake in Yondu Inc. for P501 million, or 44 percent lower than the P900 million for which it sold the same company to Xurpas in 2015.
Xurpas has warned that its financial condition will be materially affected since a substantial revenue of the group is attributed to Yondu’s performance.
“Regardless, Xurpas’s management considers the sale strategic, taking into account its ongoing corporate restructuring. Moreover, Xurpas management considers the sale necessary, taking into account Xurpas’s current financial condition,” it said.
“Yondu was a leading content developer and provider of mobile value-added services and information technology services back in 2015 when it was acquired by Xurpas,” the companies said in a disclosure.
“It has since then evolved to become a top IT solutions company in the Philippines, expanding its product portfolio to provide managed services, software development and turnkey solutions among others,” the disclosure added.
Globe’s Cu: Value to enterprise
In a statement attached to a disclosure to the stock exchange, Globe President Ernest L. Cu said reacquiring his group’s 51-percent share in Yondu will add value to Globe’s enterprise business, as Yondu has expanded its business to end-to-end software and turnkey solutions development.
“Bringing Yondu into the Globe value chain will promote synergies and strengthen the position of our enterprise business. We believe in Yondu’s growth prospects as we leverage on its capabilities in a robust industry,” he said.
Cu said the latest transaction, signed Wednesday, is in line with Globe’s “strategic imperative” of developing its information and communications technology capabilities to address the evolving demand of Filipino consumers.
Globe and Xurpas said they have signed and executed the deed of sale of shares and other definitive documents for the transaction.
Isla Lipana and Co. was engaged to assist the parties in estimating the fair value of the shares of Yondu, the companies said. The same level of discount applied in the 2015 transaction was again considered for this transaction.
Primeiro Partners acted as Xurpas’s financial advisor.
“Our divestiture of Yondu will provide the company additional liquidity, retires debt and allows us to focus on high-value, emerging, innovative, and disruptive technologies and platforms impacting both enterprise and consumer commerce,” Xurpas President Alexander Corpuz said.
Xurpas is getting rid of subsidiaries as part of a restructuring program and to raise funds to pay maturing debt.
Xeleb IPO pends
Xeleb Technologies Inc., meanwhile, was supposed to raise more than P750 million from its initial public offering in 2016. Since then it has not announced anything on the IPO plans and it still has a live application with the Securities and Exchange Commission for the said offering.
“The said entities [Xeleb] were engaged in the business of developing and distributing celebrity themed mobile games, which forms part of Xurpas’s mobile consumer business. The mobile consumer business of Xurpas Group substantially declined due to the new policies implemented by Telcos for all VAS [value-added service] providers,” it said.
“Considering that Xeleb Technologies Inc. and Xeleb Inc. currently have no significant contribution to the Xurpas Group, Xurpas’s Board approved to dissolve the said entities. The Board authorized Xurpas management to secure full control over the said entities and thereafter, dissolve and liquidate the same,” said the disclosure.
VG Cabuag and Lorenz S. Marasigan
1 comment
I believe xurpas will rise in future..