In the US, investors take notice of Converge
Dennis A. Uy
Converge ICT Solutions Inc., among the stock market darlings of the year, is getting a boost from US investors with the registration of Converge American depository receipts or ADRs.
The $2.5-million issuance of Converge ADRs was made by financial giant Citibank, according to a Sept. 16 filing with the US Securities and Exchange Commission.
The Converge ADRs were unsponsored, meaning these were made without the involvement or consent of the fiber internet provider. This also means Converge will not receive any of the offer proceeds.
The Converge ADRs will be traded over-the-counter, unless eventually listed on an exchange.
Still, companies with unsponsored ADRs benefit since this raises their profile abroad and may pave the way for a future overseas public listing.
“It should increase publicity [for] the company and hopefully improve their profile. After all, their shares have done very well in the Philippine Stock Exchange (PSE),” COL Financial Group chief equity strategist April Lee Tan told the Inquirer.
“That would help them, being a young company and all,” she added.
According to the registration statement, there will be 50 million Converge depository shares to be offered at a maximum of $5 (P250) per share. Each depository share represents the right to receive 25 common shares of Converge, which had a closing price of P34.50 apiece on Friday.
Converge, which joined the 30-member PSE index last month, has seen demand for its fiber internet services explode during the COVID-19 pandemic. This helped its share price surge about 130 percent since the start of 2021 and catapulted founders Dennis Anthony Uy of Pampanga and Maria Grace Uy into the list of top Filipino billionaires.
Converge earlier said it would spend P20 billion this year to build up its nationwide fiber internet network as it targets to cover 55 percent of households in the country by 2025. Converge had said profits in the first semester of the year surged higher by 158 percent to P3.25 billion. Total revenues hit P11.78 billion, up over 80 percent.
Its current fiber network covered about 32 percent of households in the country or 8.3 million homes passed.
