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Business

Converge stocks to be traded over-the-counter in US markets

Ramon Royandoyan - Philstar.com
Converge stocks to be traded over-the-counter in US markets
In a disclosure to the stock exchange on Monday, Converge said 50 million company shares in the form of American Depositary Receipts (ADRs) will be offered to US investors at a maximum offer price of $5.00 each.
STAR / File

MANILA, Philippines — US investors could soon have another option to invest in Converge ICT Solutions Inc. as the internet provider announced that its shares would be traded over-the-counter stateside.

In a disclosure to the stock exchange on Monday, Converge said 50 million company shares in the form of American Depositary Receipts (ADRs) will be offered to US investors at a maximum offer price of $5.00 each.

Converge is expected to rake in $2.5 million (approximately 125 million) from the offer. The company did not disclose where the proceeds from the sale would go.

The move is a “welcome development” for Pampanga-based businessman Dennis Anthony Uy, who recently debuted on Forbes’ list of the Philippines' richest with his wife Maria Grace as Converge catches the rare tailwind from the pandemic.

“This signals the confidence of an increasing number of investors in the continued strong growth of the company as we continue to reach the unserved and unserved areas in the Philippines,” Uy, who is the company’s CEO, said.

Much like Philippine Depository Receipts, which foreign investors seeking dividend investments can buy from Philippine companies, ADRs serve the same purpose for US investors.

ADR is a negotiable security that represents a certain number of shares in a foreign company that can be traded in the US. This, in turn, would allow Converge to raise capital in one of the world’s busiest financial markets without going through the process of listing on US stock exchanges and paying fees.

The ADRs that will be offered are “unsponsored”, meaning US banks could create and sell the ADRs — depending on market demand for them — without the need to ask for Converge’s consent and involvement.  Converge’s ADRs will be traded over-the-counter on US financial markets under the symbol “CVGYY”.

As it stands, Converge is one of the businesses that benefitted from pandemic lockdowns. As of end-June this year, the company said it has reached over 8.3 million Filipino homes, or 32.5% of the total households in the country, as contagion fears trigger a massive shift to remote working and online schooling.

Converge is expanding beyond its Luzon base in a bid to cover 55% of Philippine households by 2025. In the first half, residential subscriber base nearly doubled year-on-year to 1.36 million.

The company recently connected Visayas and Mindanao to its nationwide backbone, allowing it to offer services in Cebu and Davao City.

As of 12:14 p.m., shares in Converge were trading down 1.59%, tracking big losses on the main index.

AMERICAN DEPOSITARY RECEIPTS CONVERGE ICT SOLUTIONS INC. PHILIPPINE STOCK EXCHANGE
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