Internet provider Converge ICT to go public by October

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Metro Manila (CNN Philippines, July 3) – Internet service provider Converge ICT Solutions formalized its plan to go public by October, only the second company to pursue an initial public offering amid the pandemic.

The Securities and Exchange Commission said Friday that it received the prospectus for Converge's IPO plan, which is scheduled in October. The firm, officially known as Converge Information and Communications Technology Solutions, Inc., will be offering some 1.5 billion shares capped at ₱24 each, allowing it to raise ₱35.9 billion. A separate six billion units will be listed as outstanding shares owned by existing investors.

This is the biggest fund raising exercise so far for 2020, and will even outstrip the ₱20.83 billion raised by companies from the capital market from January to June as activity slowed down due to the pandemic.

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Share prices will be finalized on October 9, according to the proposed IPO schedule, and will be offered to investors between October 13 and 19. The shares will be listed on the main board of the Philippine Stock Exchange by October 26 under the symbol CICT.

Based in Pampanga, Converge is owned and run by its chief executive officer Dennis Anthony Uy and his wife Maria Grace Uy as president and chief resources officer. He is not the same person as Dito Telecommunity founder Dennis Uy.

"We intend to use our net proceeds from the offer primarily for capital expenditure requirements to accelerate our nationwide fiber network rollout and other general corporate purposes," read Converge's prospectus shared by the SEC.

The company reported ₱9.14 billion revenues in 2019, according to the regulatory filing.

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The firm tapped global banks Morgan Stanley and UBS AG as joint global coordinators and bookrunners, as well as BPI Capital and BDO Capital for local dealings.

Converge is only the second to pursue an IPO this year, as financial markets and the local economy grapple with the disastrous impact of the COVID-19 pandemic. It could be among the rare winners during the crisis, gaining an additional 50,000 residential customers in May alone – the biggest increase seen on record.

"Demand for fixed broadband in the Philippines has accelerated with the onset of COVID-19, as WFH (work from home) arrangements and social distancing became the 'new normal,'" the company said.

Billionaire businessman Injap Sia's grocery chain MerryMart went public last month, with its stock price soaring from its ₱1 guidance price. Meanwhile, Altus Property Ventures, Inc. entered the local bourse via introduction in June.

Converge said it is the biggest high-speed fixed broadband operator in the country, taking a 54 percent share in subscriptions for high-speed residential connections. Through optic fiber rather than copper cables, Converge said its broadband deals offer speeds which are 2.2 times faster than that offered by competitors.