Warburg-backed Converge ICT prices PH IPO, trims target to $600m

FILE PHOTO: A trader walks past the electronic board of the Philippine Stock Exchange in Makati city, Metro Manila, Philippines June 27, 2016. REUTERS/Romeo Ranoco

Converge ICT Solutions, a Warburg Pincus-backed fibre-optic broadband services in the Philippines, has trimmed its initial public offering (IPO) target to about $600 million after pricing its shares at 16.80 pesos ($0.35) each, according to its filing Friday.

The price is near the bottom of the indicative price range of 16.50 pesos to 19 pesos that the company set on Monday. It looks to sell 1.73 billion shares, including an overallotment option. The offer period will run from October 13 to 19. Converge initially set an $857-million target for the listing.

The $600-million target will be the second-largest ever in the country, next only to the $627 million raised by Robinsons Retail Holdings Inc in 2013. The Philippine Stock Exchange had given its approval for Converge’s IPO last week.

In the disclosure, Converge said the maximum subscription amount for local small investors who will participate in the IPO is set at 1 million pesos ($20,700) per investor.

Converge intends to use the net proceeds from the offering primarily for capital expenditures requirements to accelerate its nationwide fiber network rollout and other general corporate purposes.

The company has 750,000 residential customers mostly in and around the capital Manila. Founded in 2012 by businessman Dennis Uy, who is the current CEO, Converge ICT is the largest high-speed fixed broadband operator in the Philippines, with 54 per cent market share of high-speed residential fixed broadband subscriptions as of March 2020.

American private equity giant Warburg Pincus is a minority shareholder in the company, having invested $225 million in July 2019. Warburg Pincus has a long track record of investing in the technology, media, and telecommunications sector, with select marque investments including Bharti/Airtel, Inexio, Ziggo, and Crowdstrike.

Converge’s IPO could help revive a weak public market in the Philippines. So far this year, the local bourse only hosted one IPO – grocer MerryMart Consumer Corp, which raised $31.5 million in May.

Last year, Metro Pacific canceled the listing of its hospital unit while consumer tech company Cal-Comp Technology delayed a proposed $125-million IPO, citing market conditions.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.