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Broadband service provider Converge ICT Solutions Inc. begins the local sale of its massive initial public offering (IPO) next week after completing an overseas offering that was “oversubscribed” by global investment funds.
Taking advantage of the strong demand for the internet, as businesses and schools were forced to go online due to the pandemic, Converge is moving forward with the local stage of its IPO from October 12-16 after finalizing the offer price at P16. 80 per share.
At that price, Converge is poised to raise up to P29 billion, including shares set aside for over-allotments.
Converge will begin trading on the Philippine Stock Exchange on October 26 under the symbol “CNVRG.”
It put the offer price at the bottom of an indicative range that reached P19 per share.
Several analysts had expected a price cut, citing volatile financial markets and prospects in Converge’s core fiber internet business as rivals PLDT Inc. and Globe Telecom accelerate their own fixed broadband investments.
Even then, Converge will be valued at P126 billion, making it the third-largest Internet company in the Philippines after PLDT and Globe.
“Converge’s investment story resonated strongly with investors given the very high demand for connectivity, especially during the pandemic,” said Lauro Baja III, director of Asia-Pacific global capital markets at UBS, who helped organize the sale. global stock.
Baja said the international offering was “very oversubscribed” with 80 percent of the shares allocated to long-term emerging market funds and sovereign wealth funds.
There were no further details on the investors, but a source with knowledge of the matter said the IPO attracted global names such as the US-based BlackRock Inc., one of the world’s largest asset managers, Fidelity Investments and GIC of Singapore.
Converge’s IPO will become the largest in the Philippines after the Gokongwei’s Robinsons Retail Holdings raised P28.1 billion in 2013.
Founded by Pampanga-based businessman Dennis Anthony H. Uy, the company expects gross profits of P8 billion to partly finance its national expansion.
The rest of the money will come from shares sold by Uy and Warburg Pincus, the US private equity firm that joined Converge in 2019 through a $ 225 million investment.
Converge nearly doubled its subscribers to 730,000 during the first half of 2020. Its existing fiber optic footprint spans 35,000 kilometers.
The company is the largest fixed broadband operator in the Philippines, with a 55 percent market share as of June 30 this year, according to its investor prospectus.
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