Converge eyes sale of assets

MANILA, Philippines — Fiber specialist Converge ICT Solutions Inc. has confirmed it is reviewing the possible sale of its infrastructure assets to improve its liquidity needed for business expansion.

Converge informed the Philippine Stock Exchange (PSE) that it is looking into ways on how it can make the most of its network assets to the benefit of its shareholders.

“While management is aware of the significant value of its infrastructure assets and is regularly reviewing opportunities to maximize shareholder value, no decision has been made on any such transaction and details thereof,” Converge said.

Converge committed that it will report any material transactions as soon as it reaches a decision on the infrastructure sale.

The firm owned by billionaire Dennis Anthony Uy made the disclosure in response to a Bloomberg story on the potential sale of stake in its infrastructure platform.

Bloomberg reported that the Internet provider eyes to raise cash to distribute across its business segments and units. Converge is apparently talking with prospective advisers on a plan to bring in a minority investor into its fold.

If the deal materializes, the transaction could generate at least $1 billion depending on the final size and structure, according to the Bloomberg story.

Likewise, the plan is expected to draw interest from parallel firms in the industry and could even pull additional investments to beef up Converge’s funds.

The earnings of Converge grew by 22 percent to P3.95 billion in the first half of the year from last year’s P3.25 billion, driven by expansion projects mostly in Visayas and Mindanao.

Likewise, revenues jumped by 36 percent to P16.05 billion, from P11.78 billion, as both residential and enterprise brackets grew in double digits. In particular, residential income soared by 38 percent to P14.1 billion, while corporate returns jumped by 26 percent to P1.97 billion.

Last month, Converge chief financial officer Matthias Vukovich said the firm expects its revenue to rise by at least 25 percent this year as ongoing fiber projects seen to add new customers into its subscriber base.

Converge has passed through 13.49 million homes or 52.1 percent of total households as of June after installing close to 650,000 fiber ports in the second quarter.

Converge shares on Friday rose by two percent to P17.88 a piece.