July 3, 2020 / 9:46 AM / a month ago

UPDATE 1-Philippine broadband firm Converge ICT files for up to $725 mln IPO

* Up to $725 mln IPO could be country’s largest

* Country’s 2nd IPO of 2020 amid dampened investor interest

* Converge betting on demand from home working, e-learning (Adds details, background)

By Neil Jerome Morales

MANILA, July 3 (Reuters) - Philippine fiber broadband services provider Converge ICT Solutions Inc, on Friday filed for an initial public offering (IPO) of up to 35.92 billion pesos ($725 million) on the local bourse, braving volatile markets amid the coronavirus pandemic.

Converge ICT is seeking regulator approval to sell as many as 1.496 billion shares at a maximum price of 24 pesos ($0.48) each in October in the country’s second IPO this year, according to filing documents to the corporate regulator.

It has 750,000 residential customers mostly in and around the capital and is banking on increased demand for broadband from e-commerce activity and a surge in home working and learning as a result of the coronavirus.

The IPO could potentially be the country’s biggest on record. However, regulatory filing prices in the Philippines have often been set far above value and the number of shares offered could be reduced during the IPO process.

Converge ICT, which lists U.S. private equity firm Warburg Pincus as a minority shareholder, plans to put proceeds from the sale into building a $1.8 billion internet backbone to support a nationwide roll-out of what it says is fast and affordable fiber internet.

It has hired Morgan Stanley and UBS as global coordinators, and BPI Capital and BDO Capital as joint local underwriters.

The Philippines has over 40,000 coronavirus cases and though restrictions have started easing, many offices remain closed and e-learning programmes are being prepared for millions of students following the president’s vow not to reopen schools until a vaccine is available.

Fundraising through IPOs in Southeast Asia has taken a beating after a strong last year, as volatility in markets dampened investor interest. Many companies have shelved IPO plans amid weak market valuations.

The Philippines is the worst-performing bourse in the region, with its broader stock index down 18% year-to-date. (Reporting by Neil Jerome Morales; Additional reporting by Anshuman Daga in Singapore; Editing by Martin Petty)

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