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The Philippine Stock Exchange (PSE) approved the public debut of Converge ICT Solutions Inc., which would become the country’s third-largest Internet provider by market value and propel founder Dennis Anthony H. Uy of Pampanga to the status of billionaire in dollars.
Amid a global health crisis that has driven demand for online services, Converge ICT’s initial public offering (IPO) could be worth up to P41.5 billion at the maximum offer price, making it the largest In Philippines.
A public notice from PSE published on Thursday showed that the owners of Converge ICT, led by Uy and US private equity firm Warburg Pincus, were selling at least 20 percent of the company to investors from Oct. 13 to 19.
Converge ICT aims to launch its commercial debut on October 27 this year. It would be the second initial public offering in 2020 after MerryMart Consumer Corp., a chain of grocery stores owned by businessman Edgar “Injap” Sia II.
The final price of the IPO would be set on October 9 this year, the PSE notice showed.
So far, the price is set at a maximum of $ 24 per share, which would value 100 percent of Converge ICT at $ 180.6 billion, or behind telecom giants PLDT Inc. ($ 289.5 billion) and Globe Telecom ($ 80.2 billion). ).
Converge ICT focuses on the provision of fiber Internet services, a highly underserved segment due to the challenges posed by the provision of fixed Internet in the Philippines. Fiber had a penetration of just 7 percent at the end of 2019.
Within this market, Converge ICT is the leading fixed broadband operator in the Philippines, with a 55 percent market share as of June 30 this year, according to its latest investor prospectus.
The company ended the first half of 2020 with more than 730,000 subscribers, almost double the comparable figure from last year due to increased demand amid the COVID-19 pandemic.
The IPO would also provide a windfall for Uy and Warburg Pincus, who entered Converge ICT last year through a $ 225 million investment.
Based on the total offering of 1.73 billion shares, more than 70 percent are secondary shares, which means the money goes to the sellers. The secondary sale is valued at more than P30 billion at the maximum price of P24 per share.
The main offering, the proceeds of which would go to the company, amounts to 480.84 million shares or P11.5 billion. This would be used by Converge ICT to finance its expansion and completion of a nationwide Internet backbone by 2021.
Converge ICT has contracted a large number of local and international banks to handle the IPO, most of which is expected to be absorbed by foreign investors.
The list of banks included Morgan Stanley Asia (Singapore) Pte., UBS AG Singapore Branch, Credit Suisse (Singapore) Ltd. and Merrill Lynch (Singapore) Pte. Limited.
The local banks are BPI Capital Corp., BDO Capital & Investment Corp., Asia United Bank Corp., First Metro Investment Corp., Maybank ATR Kim Eng Capital Partners, Inc., PNB Capital and Investment Corp. and RCBC Capital Corp.
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