SEC Approves ₱20 Billion Bond Offering of Converge

The Securities and Exchange Commission (SEC) recently approved the plan of telecom service provide Converge ICT Solutions, Inc. to raise up to ₱20 billion from bonds sales. A statement from the regulator declared that it “has considered favorably the fixed-rate bond offering by Converge Information and Communications Technology Solutions, Inc.”

However, the offering is still subject to the company’s “compliance with certain remaining requirements,” added the SEC. The ₱20-billion fixed-rate bonds of the telco firm may be offered in tranches within three years. “For the first tranche, the listed internet provider will offer to the public up to ₱5 billion of bonds due 2027, with an oversubscription option of up to ₱5 billion,” the regulator explained. “Assuming the oversubscription option is fully exercised, the company could net up to ₱9.87 billion from the offer.”

According to the SEC, the proceeds from the maiden bond offer will fund the capital expenditures (Capex) of Converge in line with “plant equipment and other property, plant, and equipment and intangible assets for the expansion of its nationwide fiber network.” BDO Capital & Investment Corp. will serve as the issue manager, while BPI Capital Corp. will be a joint lead underwriter and book runner.

Over the past year, Converge spent ₱25 billion on its Capex initiatives. Comparably in 2022, the company is expected to spend between ₱26 billion and ₱28 billion for its Capex projects which include selected investments into international subsea cables as well as the enhancement of its information technology systems.

During the 2020 to 2021 period, the telco firm more than doubled its income from ₱3.39 billion to ₱7.16 billion and its revenues also went up by 69% from ₱15.65 billion to ₱26.48 billion. Additionally, its earnings before interest, taxes, depreciation and amortization margins grew from 52.5% in 2020 to 55.9% in 2021.

On Wednesday, shares of Converge ICT closed at ₱28.80 apiece accounting for a 5.93% rise compared to the previous trading day. The Philippine Stock Exchange Index (PSEi), meanwhile, added 0.49 points (0.007%) to close at 7,009.43. The all-shares index also advanced by 8.96 points (0.24%) closing at 3,724.75.

Source: BusinessWorld, Inquirer