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INITIAL PUBLIC OFFER. Converge ICT Founder and CEO Dennis Anthony Uy discusses the result of the initial public offering on Monday (Oct 26, 2020) in which the company raised around PHP29.1 billion. Company executives said their goal is to reach 55 percent of all households with PH by 2025. (Photo by Joann Villanueva)
MANILA – Fixed broadband provider Converge Information and Communications Technology Solutions Inc. (Converge ICT) raised around PHP29.1 billion from its initial public offering (IPO), the second-largest on the local exchange, despite the pandemic .
In a briefing on Monday, Converge ICT founder and CEO Dennis Anthony Uy said the proceeds from the IPO will boost the company’s ability to build the nation’s largest fiber broadband network.
Uy said they lean on strong demand for internet connection, the general youth population and limited supply as the main drivers of their company’s growth.
“We dominate in a market that is severely underserved and presents a blue ocean opportunity,” he added.
In a disclosure, the company said it was able to attract more than PHP4.856 billion in demand from domestic investors during the IPO alone, while fundamental investments exceeded PHP10.93 billion.
During the same briefing, Converge ICT Chief Financial Advisor Matthias Vukovich said they are optimistic about the strong growth of the company due to strong demand, with Filipinos recording the longest daily internet use with more than 10 hours per day; demographics with more than 75 percent of the population under 40; the explosion of video streaming services; and a thriving service industry that includes the business process outsourcing (BPO) industry.
Vukovich said that the demand for high-speed Internet connection is high in the country, but there are supply problems, as the Philippines has one of the least reliable services in Asia.
“This mismatch between supply and demand presents us with a great opportunity and several years on the way for continued growth,” he said.
Vukovich also said that company executives “believe the Philippines is at the tipping point” and forecast that it “will at least triple our fiber penetration in the next five years.”
At the end of June this year, he said that Converge ICT has around 730,000 residential subscribers, while businesses account for around 20 percent of total revenue with around 10,000 commercial subscribers.
Vukovich said the proceeds from the IPO will be used to further expand its network over the next 18 months to reach about 55 percent of all households nationwide by 2025.
“The primary proceeds raised from this IPO would help us accelerate our growth plans, allowing us to remain at the forefront of capturing this huge market opportunity,” he added.
Meanwhile, Finance Secretary Carlos Domínguez III, in his speech at the IPO event on Monday, said that Converge ICT’s decision to go ahead with the IPO “is a strong vote of confidence in the ability of our economy to recover strongly after the difficulties caused by the pandemic. “
He said the government has been driving digital transformation to tackle bureaucracy, speed up service delivery and tackle corruption.
Domínguez said the pandemic accelerated this offering as people have moved to work remotely.
“Right now, digital technologies have never been more important in our lives. Now, more than ever, we have become very dependent on fast and reliable Internet services, “he said.
Therefore, he encouraged Converge ICT officials to use the proceeds from the IPO to improve their network and serve more Filipinos.
“We will count on your company to help us bridge the digital divide as we deliberately move into a new economy,” he added. (PNA)
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