Based on registration statement filed with the Securities and Exchange Commission, Converge will offer up to 1.3 billion common shares with an overallotment of up to 195.19 million shares at a maximum of P24 per share.
Converge has mandated Morgan Stanley and UBS AG as joint global coordinators and joint bookrunners. BPI Capital Corp. and BDO Capital, on the other hand, will serve as joint local underwriters and joint bookrunners.
Proceeds from the initial public offering will be used to support the expansion of the company’s nationwide fiber network rollout as well as other general corporate purposes.
Pricing of the share has been set on Oct.9 while the offer period will run from Oct.13 to 19. Listing of the company’s shares, meanwhile has been set on Oct.26
“Net proceeds from the IPO, cash flows from operations, available cash, existing credit facilities which are mostly in seven to 10-year term loans and significant leverage headroom ratio of only 0.4 x as of Dec. 31, 2019 will enable us to fund our planned nationwide fiber network expansion,” Converge said.
Converge is the country’s largest high-speed broadband operator in the Philippines with its residential business capturing a 51% market share of new subscriptions. Its enterprise business is growing at 3.3 times the pace of the overall market between 2016 and 2019.
Between 2017 and 2019, revenue grew at a compounded annual growth rate of 76.3%. Last May, the company acquired 500,000 residential subscribers, the highest monthly gross adds on record.
In June, Converge added around 60,000 new residential subscribers, exceeding the May 2020 record by 20%.
Demand for fixed broadband in the Philippines has accelerated with the onset of COVID-19 as work-from-home arrangements and social distancing became the new normal.
“The total addressable market is forecast to grow by another $1.7 billion in revenues to reach $6.9 billion in revenues by 2025. We believe that the significant scale of such unserved demand serves as fertile ground for multiple operators in the market, especially Converge, to thrive and provide a multi-year runway for these operators to grow rapidly,” the company said.