US, China investors buy into PLDT’s voyager for $175 million

MANILA, Philippines — Telco giant PLDT Inc. has inked agreements with investors led by global investment firm KKR and China’s c to separately acquire up to $175 million worth of newly issued shares in its digital innovations arm Voyager Innovations Inc.

PLDT will remain as the majority shareholder of Voyager, while the new investors will have substantial minority stake in the country’s leading digital technology company.

Closing of the transaction is expected within the fourth quarter,  PLDT announced yesterday.

“Having global powerhouses such as KKR and Tencent as investors in Voyager Innovations demonstrates not only their confidence in the company’s ability to execute its vision, but also their confidence in the Philippine technology industry as a whole,” PLDT president and chief executive officer Manuel V. Pangilinan said.

PLDT said the agreements contain provisions for Voyager Innovations to issue additional shares to other investors which, if this were to occur, would reduce PLDT’s ownership to less than 50 percent while still remaining as the largest shareholder.

The new external funding in Voyager Innovations marks the largest investment to date in a Philippine technology company.

With the global expertise and fresh capital from the new investors, PLDT said Voyager Innovations would have greater access to mobile payments and the internet as a whole.

“This is a watershed moment not only for Voyager Innovations but also for the Philippines. With this investment by KKR and Tencent, we will trigger an inflection point in digital adoption and financial inclusion in the country,”

Voyager Innovations president and chief executive officer Orlando Vea said.

KKR’s investment in Voyager Innovations is being funded from KKR Asian Fund III.

The investment is KKR’s first private equity investment in the Philippines and is part of the firm’s strategy to invest in high-growth markets that the firm believes can benefit from a rapid increase in technology adoption.

Other investments KKR has made in the technology and fintech sectors include Go-Jek (Indonesia’s leading on-demand mobile platform for ride hailing, food delivery, and mobile payments), Suishou Technology (one of China’s largest personal finance management platforms) and First Data (global payment technology and services solutions provider with a presence in 118 countries).

“We are excited about Voyager Innovations and to further invest behind online payments leaders in emerging markets. Voyager Innovations provides critical digital and financial services to millions of Filipinos looking to join the digital economy for work and play. We look forward to leveraging our industry expertise and resources to help enhance the company’s mission of financial inclusion and accelerate its growth at a time when the digital economy is more important than ever,” said Terence Lee, director of KKR’s Southeast Asia team.

“Voyager Innovations connects the growing smartphone population in the Philippines to online payments and financial services. Tencent is glad to support Voyager Innovations and to advance financial inclusion,” Tencent chief strategy officer James Mitchell said.

Tencent is a leading provider of internet services in China and has been identified earlier as among the foreign investor partners in Voyager.

PLDT said investment in Voyager Innovations is not subject to the compulsory merger notification regime under the Philippine Competition Act and its Implementing Rules and Regulations.

The Bangko Sentral ng Pilipinas likewise confirmed that it interposes no objection to the investment, it said.

 Bank of America Merrill Lynch is acting as financial advisor to Voyager Innovations.

Latham & Watkins and Picazo Buyco Tan Fider & Santos are acting as legal counsel to PLDT and Voyager Innovations. Paul, Weiss, Rifkind, Wharton & Garrison, and Sycip Salazar Hernandez & Gatmaitan are acting as legal counsel to KKR and Tencent.

Voyager  is behind products and services which seek to promote digital access, customer engagement, digital commerce and digital financial services, such as PayMaya and Lendr.