Converge sets IPO price at P16.80/share

MANILA, Philippines — Converge ICT has set the price for its initial public offering at P16.80 per share, the largest IPO in the country and the largest telecom IPO in SoutheastAsia at P29.1 billion.

The P16.80 per share is lower than the maximum IPO price of P24 per share.

Converge said “the transaction was very well-received by both international and domestic institutional investors, with over 80 percent of the IPO allocated to fundamental investors, consisting global emerging market long-only funds and sovereign wealth funds.”

The IPO was at least two times oversubscribed, according to people familiar with the market.

The offer period has been set on Oct. 12 to 16 with the listing of the shares scheduled on Oct. 26.

Converge will use part of the proceeds to fund its nationwide expansion program, especially its plan to connect Luzon, Visayas and Mindanao under the Converge network.

Dennis Uy, the company’s founder and CEO, is optimistic about the prospects for its business, saying the fixed broadband market in the Philippines is currently at an inflection point with the demand for broadband subscriptions expected to increase.

“Converge is well-positioned to capture the tremendous market opportunities,” he said.

Cornerstone investors include Genesis Investment Management LLP, Ghisallo Master Fund LP, Macquarie Funds Management Hong Kong Limited (acting on behalf of certain investment funds), Magna New Frontiers Fund, Oaks Emerging and Frontier Opportunities Fund, OMERS Administration Corp., Segantii Asia-Pacific Equity Multi-Strategy Fund and Thornburg Investment Management Inc.

Morgan Stanley Asia (Singapore) Pte. and UBS AG Singapore branch will serve as joint global coordinators and joint bookrunners for the offer, together with Credit Suisse (Singapore) Ltd. and Merrill Lynch (Singapore) Pte. Ltd. as international joint bookrunners.

Converge tapped BPI Capital Corp. as sole local coordinator and joint local underwriter and joint bookrunner with BDO Capital & Investment Corp.

Asia United Bank Corp., First Metro Investment Corp., Maybank ATR Kim Eng Capital Partners,  PNB Capital and Investment Corp. and RCBC Capital Corp. will also act as local participating underwriters.

Converge is backed by New York-based private equity firm Warburg Pincus.