US-based Warburg Pincus, one of the world’s biggest private equity firms, sold a 5.6-percent stake in Converge ICT Solutions Inc. through a block sale, raising P12.6 billion.
Coherent Cloud Investments B.V., managed by Warburg Pincus, sold 420 million shares or 5.6 percent of the outstanding share of Converge in a block trade at the Philippine Stock Exchange on Nov. 19.
The transaction brought Coherent’s stake in Converge down to 10.25 percent from 15.83 percent.
“The transaction increases Converge public float from 20.4 percent to 26 percent, putting Converge in a stronger position to be included in the MCSI [Morgan Stanley Capital International] Index at the upcoming index reviews,” Maria Grace Uy, co-founder, and president of Converge, said in a virtual briefing.
“In fact, this transaction was very well-received both globally and domestically. Demand for the base size of the transaction was well over subscribed. There was strong reception from a high quality investors that enabled us to increase the base size of the transactions and also accommodate the robust investor interest,” she said.
Uy said the fundamental operational and financial performance of Converge is stronger than ever. “We will continue to focus on growing the business and delivering value to our customers and our shareholders,” she said.
Mathias Vukovich, chief financial officer advisor of Converge, said Warburg Pincus remains a significant shareholder with 10.25-percent stake.
“They continue to be active day to day both on the board level and also operational l level in partnering with us,” he said.
“With our investible market cap now expanded by 5.6 percent, we believe that the transaction will improve our trading liquidity, allowing for greater investors,” he said.
Converge ICT earlier reported a net income of P5.2 billion in the first three quarters, up 136 percent from P2.2 billion in the same period last year.
Consolidated revenues grew by 76.4 percent year-on-year to P18.8 billion as of end-September.
The company said residential subscribers grew 75 percent to 1.57 million as of end-September from 900,531 a year ago.
Revenues from enterprise also increased 8.5 percent to P2.45 billion.
Converge ICT said it deployed more than 13,000 kilometers of fiber optic cable to boost its backbone network. It recently completed its North Luzon fiber optic loop to provide redundant traffic routing in case of a network outage.
The company is present in 440 cities and municipalities across the country.