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KKR, China's Tencent buy into Voyager

PLDT Inc. announced on Thursday the investment of global investment firm KKR and China’s leading internet service provider Tencent Holdings Ltd. in Voyager Innovations Inc. for $175 million.

Under the agreement, KKR and Tencent will separately subscribe to a total of up to $175 million worth of newly-issued shares in Voyager, giving them a substantial minority stake in the Philippines’ leading digital technology company.

Upon the closing of the transaction, which is expected within the fourth quarter of 2018, PLDT will remain as the majority shareholder of Voyager.

The agreements also contain provisions for Voyager to issue additional shares to other investors which could reduce PLDT’s ownership to less than 50 percent while still remaining the largest shareholder.

PLDT said the new external funding in Voyager Innovations marked the largest investment to date in a Philippine technology company.

With the global expertise and fresh capital from the new investors, Voyager will enable greater access to mobile payments and the internet as a whole for the country’s population.

“Having global powerhouses such as KKR and Tencent as investors in Voyager demonstrates not only their confidence in the company’s ability to execute its vision, but also their confidence in the Philippine technology industry as a whole,” PLDT chairman, president and chief executive Manuel Pangilinan said.

Voyager president and chief executive Orlando Vea said the investment was a watershed moment for Voyager Innovations and the Philippines.

"With this investment by KKR and Tencent, we will trigger an inflection point in digital adoption and financial inclusion in the country,” Vea said.

Terence Lee, director on KKR’s Southeast Asia team, said “we are excited about Voyager Innovations and to further invest behind online payments leaders in emerging markets. Voyager Innovations provides critical digital and financial services to millions of Filipinos looking to join the digital economy for work and play.

"We look forward to leveraging our industry expertise and resources to help enhance the company’s mission of financial inclusion and accelerate its growth at a time when the digital economy is more important than ever,” he added.

KKR’s investment in Voyager is being funded from KKR Asian Fund III. The investment is KKR’s first private equity investment in the Philippines and is part of the firm’s strategy to invest in high-growth markets that the firm believes can benefit from a rapid increase in technology adoption.

Other investments KKR has made in the technology and fintech sectors include Go-Jek (Indonesia’s leading on-demand mobile platform for ride hailing, food delivery, and mobile payments), Suishou Technology (one of China’s largest personal finance management platforms) and First Data (global payment technology and services solutions provider with a presence in 118 countries).

James Mitchell, chief strategy officer of Tencent, said Voyager connected the growing smartphone population in the Philippines to online payments and financial services.

"Tencent is glad to support Voyager Innovations and to advance financial inclusion,” he said.

The foregoing investment in Voyager Innovations is not subject to the compulsory merger notification regime under the Philippine Competition Act and its implementing rules and regulations. In addition, the Bangko Sentral ng Pilipinas confirmed that it had no objection to the investment.

Bank of America Merrill Lynch is acting as financial advisor to Voyager Innovations. Latham & Watkins and Picazo Buyco Tan Fider & Santos are serving as legal counsel to PLDT and Voyager Innovations. Paul, Weiss, Rifkind, Wharton & Garrison, and Sycip Salazar Hernandez & Gatmaitan are acting as legal counsel to KKR and Tencent.

Rival Globe Fintech Innovations Inc. (Mynt), a wholly-owned unit of Globe Capital Venture Holdings under Globe Telecom Inc. and Ayala Corp., earlier signed a strategic partnership with Ant Financial Services Group.

Ant Financial is an affiliate of Chinese billionaire Jack Ma’s Alibaba Group.

Topics: PLDT Inc. , Tencent Holdings Ltd. , Voyager Innovations Inc. , Manuel Pangilinan
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