Converge to return to the debt market
Fiber optic internet provider Converge ICT Solutions Inc. has disclosed potential plans to raise funds by tapping the remaining 10 billion pesos in its bond registration in the second half, as it intends to further increase the reach of its customers across the country.
Matthias Vukovich, chief financial office adviser at Converge, said in a briefing on Monday that the internet service provider was “well hedged in the second half of the year.” It is expected to spend up to 28 billion pesos this year on expansion initiatives.
“But we will likely raise additional debt in the second half of the year,” he said, adding that it could come from the bond pool or bilateral credit lines with banks.
“We have very attractive terms on both sides.”
Last month, Converge completed its first 10 billion peso bond issue, which was eight times oversubscribed. The 5.59% debt offering will mature on April 8, 2027.
The proceeds will fund Converge’s projects, including network expansion of its fiber optic broadband services, particularly in unserved and underserved areas of the country.
Regarding equity financing, Vukovich said it is not planned at this time.
Converge COO Jesus Romero said the company continues to aggressively expand its network nationwide.
“[There] is still plenty of room to grow with Luzon. There are a lot of areas our network has yet to reach,” he said.
In the northern region, Romero said the company is then targeting Abra, Kalinga, Ifugao and the Mountain Province. It is also looking to establish a presence in Negros Occidental and Leyte.
At the end of March, Converge’s network had more than 12.2 million households and more than 1.8 million residential subscribers. It deployed more than 640,000 new fiber-to-the-home ports in the first quarter.
Converge saw its net income improve 27% year-on-year to 1.97 billion pesos in the first quarter, with revenue from its residential and business segments growing 42% and 25%, respectively. Consolidated revenue increased by 40% to P7.75 billion for the period.
“We are seeing solid growth in our finances in the first quarter of 2022 and expect to meet our full-year targets as we remain aggressive in our network rollout and marketing activities, both in segments homes and businesses,” said the CEO of Converge and co. -founder Dennis Anthony Uy said. INQ
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