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Converge ICT Solutions seeks IPO this year

6 Jul 2020

Privately-owned fibre broadband provider Converge ICT Solutions plans to launch an initial public offering (IPO) in October this year seeking to raise up to PHP35.9 billion (USD726 million). The Manila Bulletin cites documents the ISP has filed with the SEC that outline plans to offer up to 1.3 billion shares, plus an over-allotment option of around 195 million shares, with an initial offer price of PHP24 per share. The filing also confirms the share offer comprises 415.7 million primary and 885.6 million secondary shares, while the over-allotment option will also reportedly come from the selling shareholders Comclark Network & Technology Corporation and Coherent Cloud Investments, controlled by founder Dennis Anthony Uy — an entrepreneur from the northern province of Pampanga and no relation to the Davao tycoon Dennis Ang Uy. The paper clarifies that as much as 70% (910.9 million) of shares on offer will be allocated for institutional investors at home and abroad, while the remaining 30% will be offered via the Philippine Stock Exchange’s trading participants (20%) and its local small investor programme (10%). It is understood that Morgan Stanley Asia (Singapore) and UBS AG Singapore will act as the joint global coordinators and bookrunners on the IPO, while BPI Capital will be the local coordinator, underwriter and bookrunner; BDO Capital & Investment will also act as joint local underwriter and bookrunner.

Converge is looking to run the share offering from 13-19 October, ahead of a targeted listing on 26 October 2020. The proceeds of the IPO will be used in the main for CAPEX projects to support its planned nationwide fibre-optic network expansion. The ISP is aiming to bring its fibre-optic broadband internet service to the whole country by 2023 and hopes to cover ‘tens of millions of customers’ with the new service and secure an overall 30% market share in the next ‘few years’. Converge claims to be ‘the largest high speed fixed broadband operator in the Philippines – by high speed residential fixed broadband subscriptions – with a 54% [segment] share as of 31 March 2020.’ Last year it started expanding its network outside Luzon and hopes ‘to substantially complete its primary nationwide backbone loop and connect Luzon, Visayas and Mindanao by the end of 2021’.

Philippines, Converge ICT Solutions

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