LISTED fiber internet service provider Converge ICT Solutions, Inc. has obtained approval from the Securities and Exchange Commission (SEC) for its plan to raise up to P20 billion from the sale of bonds.
“The SEC has considered favorably the fixed-rate bond offering by Converge Information and Communications Technology Solutions, Inc.,” the agency said in a statement on Wednesday.
It said the commission sitting en banc resolved on March 22 to render effective the registration statements of Converge covering up to P20-billion shelf-registered bonds.
The offering is subject to the company’s “compliance with certain remaining requirements,” the agency also said.
The SEC noted that Converge may offer the P20-billion fixed-rate bonds in tranches within three years.
“For the first tranche, the listed internet provider will offer to the public up to P5 billion of bonds due 2027, with an oversubscription option of up to P5 billion.”
“Assuming the oversubscription option is fully exercised, the company could net up to P9.87 billion from the offer,” the agency added.
Proceeds, according to the SEC, will be used to fund Converge’s capital expenditures (capex) in connection with “plant equipment and other property, plant, and equipment and intangible assets for the expansion of its nationwide fiber network.”
The first tranche of bonds will be offered at face value from March 14 to 18, and will be listed on the Philippine Dealing & Exchange Corp. on March 25.
The regulator noted that Converge engaged BDO Capital & Investment Corp. as the transaction’s issue manager, while working with BPI Capital Corp. as joint lead underwriter and bookrunner.
Converge expects to spend around P26-28 billion for capex projects this year, higher than last year’s P25 billion. The company’s capex initiatives for the year will include selected investments into international subsea cables and enhancement of its information technology systems.
Converge said its net income more than doubled to P7.16 billion in 2021 from P3.39 billion in 2020. Its revenues increased by 69% to P26.48 billion in 2021 from P15.65 billion previously.
The company saw its earnings before interest, taxes, depreciation and amortization margins expand to 55.9% last year from 52.5% in 2020.
Converge ICT shares closed 5.93% higher at P28.80 apiece on Wednesday. — Arjay L. Balinbin