By Denise A. Valdez, Senior Reporter
FIBER INTERNET provider Converge ICT Solutions, Inc. has secured the go signal from the Philippine Stock Exchange, Inc. (PSE) for its initial public offering (IPO) that could raise up to P41.55 billion this month.
In a notice on its website on Thursday, the bourse operator said it approved the application of Converge to list its shares on the PSE main board, with its offer period scheduled from Oct. 13 to 19.
The company aims to offer up to 1.73 billion shares, composed of 480.84 million shares for the primary offering, 1.02 billion shares for the secondary offering and 225.79 million shares for the over-allotment option.
Converge may price the shares at a maximum of P24 each, but the price setting date will be on Oct. 9. Target listing date is on Oct. 27.
Converge’s planned IPO is poised to be the Philippines’ biggest IPO to date.
Once listed, the company may have a market capitalization of up to P180.63 billion and a public float of about 23%.
“We are glad that Converge chose to tap the equities market to raise funds for its capital expenditures… We are looking forward to the company’s market debut especially as demand for internet connection is expected to remain robust,” PSE President and CEO Ramon S. Monzon said in a statement.
Converge’s IPO would only be the second for 2020, following a year of extreme volatility due to the coronavirus pandemic. Grocery operator MerryMart Consumer Corp. listed its shares in June.
Despite heightened uncertainty with the pandemic, the internet provider’s IPO is still expected to generate traction from investors, PNB Securities, Inc. President Manuel Antonio G. Lisbona said.
“I think this IPO is well-timed given that there is a large underserved market with willingness to spend on better connectivity,” Mr. Lisbona said in a text message. PNB Securities is a sister company of PNB Capital and Investment Corp., which is a local participating underwriter for Converge’s offering.
“Demand-wise, PNB Securities has been receiving subscriptions since last month and we expect the volume to surge further as the days pass,” Mr. Lisbona added.
But despite the increased demand for internet services, Converge’s pricing must be attractive to draw investors, especially as foreign investors are on a selling mode, Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said.
“With the negative economic activity at this time and investors at the sidelines, (the) lPO price offering of Converge must be very attractive in order to convince the investors, local as well as foreign, on investing as this is a huge offering,” Mr. Pangan said in a text message.
Converge ICT has tapped Morgan Stanley Asia (Singapore) Pte. and UBS AG Singapore Branch as joint global coordinators and bookrunners for the offering. Credit Suisse (Singapore) Ltd. and Merrill Lynch (Singapore) Pte. Ltd. are the international joint bookrunners.
For local investors, BPI Capital Corp. is the sole local coordinator, and with BDO Capital & Investment Corp., the joint local underwriters and bookrunners.
Other local participating underwriters are Asia United Bank Corp., First Metro Investment Corp., Maybank ATR Kim Eng Capital Partners, Inc., PNB Capital and RCBC Capital Corp.