Converge ICT sets IPO price at bottom end of range

12 Oct 2020

Philippines-based fibre broadband provider Converge ICT Solutions, which is controlled by Pampanga entrepreneur Dennis Anthony H Uy, has cut the price of its initial public offering (IPO) to PHP16.80 (USD0.348) per share, putting it close to the bottom end of its PHP16.50-PHP24.00 per share range. The Business Mirror reports that the decision means the telco will only be able to raise around PHP29 billion from the offering – roughly 30% lower than the PHP41.55 billion it could have generated if it had hit its top-end price.

Converge is looking to place 480.84 million primary shares and 1.02 billion secondary shares and has set up an over-allotment option of 225.79 million shares. Of the offer shares, 70% are reported to be allocated for institutional investors which include the cornerstone investors. The paper notes that the fibre provider is offering a significant portion of shares to cornerstone investors including Genesis Investment Management, Ghisallo Master Fund, Macquarie Funds Management Hong Kong, Magna New Frontiers Fund, Oaks Emerging and Frontier Opportunities Fund, OMERS Administration Corp, Segantii Asia-Pacific Equity Multi-Strategy Fund and Thornburg Investment Management. Further, it adds that Warburg Pincus, acting through Coherent Cloud, made a commitment in 2019 to invest USD225 million in Converge, all of which has now been invested, the telco said.

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