Converge open to new strategic investors

MANILA, Philippines — Fiber broadband provider Converge ICT Solutions Inc. is open to taking in new strategic investors as the exit of Warburg Pincus affiliate Coherent Cloud Investments in the company looms.

“We are not closing our door to potential long term strategy investors who will become our growth partners,” Converge founder and chief executive officer Dennis Anthony Uy said.

Warburg Pincus, through Coherent Cloud, invested $225 million for a 29 percent interest in Converge in 2019, prior to the company’s initial public offering.

Last week, Converge completed the buyback of 259.72 million shares from Coherent Cloud worth P6.5 billion.

The buyback was concurrent with the accelerated book build offering (ABO) by Coherent Cloud, which witnessed strong demand from international and local investors.

Coherent Cloud will also distribute within 30 days its remaining shares in Converge ICT to certain parties as part of existing arrangements.

Upon completion of the ABO, buyback, and transfer of remaining shares, Coherent Cloud will fully exit from the publicly listed fiber broadband provider.

“We have always been open to any strategic partnerships that will add value service offerings for the Filipino people,” Converge president, chief resource officer, and chief risk officer Maria Grace Uy said.

She said the company welcomes the potential entry of more international investors with the liberalization of foreign investments in the country’s telecommunications industry.

“We can expect more investment in the industry, which is good for the Filipino people. We are ready for new entrants as we have been working to expand our network and improve our services,” Grace said.

Given its aggressive expansion, the subscriber base of Converge has been steadily growing from 529,629 subscribers in 2019 to over one million in 2020, and to 1.8 million as of end- March.

“This year, the company is still ramping up on capex. This will decline starting next year, where we expect to start becoming free cash flow positive,” Grace said.

Meanwhile, Dennis said Converge is keen on pursuing partnerships with satellite providers to bring high-speed broadband to far-flung areas in the country.

“We believe that satellite technologies complement our fiber broadband services to reach more unserved remote areas in the country,” he said.

Starlink, a division of American aerospace company SpaceX owned by tech magnate and billionaire Elon Musk, was given the green light by the National Telecommunications Commission to start offering internet access services to the Philippine market.