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Business

High demand seen as Converge lowers IPO price to P16.8 per share

Ian Nicolas Cigaral - Philstar.com
Converge
Converge ICT logo
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MANILA, Philippines — Broadband services provider Converge ICT Solutions Inc. on Friday set a cheaper price for its maiden share sale, setting the stage for the country’s second biggest stock market debut.

In a letter to the stock exchange, the company of Pampanga-based businessman Dennis H. Uy would sell shares at P16.8 apiece during its initial public offering (IPO) set between October 12 and 16. The target official listing is on October 26.

Set lower than original indicative price of P24 each and then later on at P19, Converge shares are expected to attract healthy demand from investors believing the internet provider is among the few firms benefiting from a pandemic-induced rise of work from home arrangements.

“The demand will be much higher than when it was in the ceiling,” Luis Limlingan of Regina Capital Development Corp., a brokerage, said in a Viber message when sought for comment.

April Lee Tan, research head at COL Financial, agreed, saying in a text message: “The story of Converge is good. At P16.8, it's less expensive so hopefully there will be more demand.”

The Warburg Pincus-backed firm is set to rake in P29 billion from the fundraising activity, which if realized, would follow the maiden offering of Robinsons Retail Holdings Inc. back in 2013 as among the biggest on record.

Converge will sell 1.73 billion shares, which includes an overallotment option of up to 225.8 million stocks should demand breach shares on offer and the company ultimately decides to raise more. 

At the height of enhanced community quarantine in Luzon in May, Converge registered a record-high of 50,000 new gross residential subscribers, although the company’s existing fiber network is currently limited on the island. 

The company plans to use 90% of the IPO proceeds to expand that to Visayas and Mindanao by 2021. The balance of 10% will be earmarked for general corporate purposes.

Converge is only the third company to go on public in this tumultuous year. In June, MerryMart Consumer Corp., a grocery operator, raised P1.6 billion through an IPO, while Ayala-led AREIT Inc., the first local real estate investment trust, got P13.6 billion last August. 

CONVERGE ICT SOLUTIONS INC.

INITIAL PUBLIC OFFERING

IPO

NOVEL CORONAVIRUS

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