Warburg Pincus’ block sale of its Converge ICT Solutions Inc. shares has placed the fiber broadband provider in a “stronger position” and may result in the company’s inclusion in the Morgan Stanley Capital International (MSCI) index.
Converge President Grace Uy said the sale resulted in an increase in Converge’s public float, thereby improving its trading liquidity. This also allows Converge to strengthen its bid to be included in the MSCI, which requires companies to have a wide public float.
“The transaction increases Converge’s public float from 20.4 percent to 26 percent, putting Converge in a stronger position to be included into the MSCI index at the upcoming index reviews,” she said.
Warburg Pincus-controlled Coherent Cloud Investments BV sold on Friday 420 million of its shares in Converge for P12.6 billion. This reduced Warburg Pincus’ stake in Converge to 10.25 percent from 15.8 percent.
“The transaction was very well received both globally and domestically. Demand for the base size of the transaction was well-oversubscribed. There was strong reception from high-quality investors that enabled us to increase the base size of the transactions to accommodate the robust investor interest,” Uy said.
Warburg Pincus continues to be highly committed and involved in working together with Converge, Converge Chief Financial Advisor Matthias Vukovich said.
“Now, with our investible market cap increased by 5.6 percent, we believe that it will significantly improve our trading liquidity allowing for greater investor participation and trading of our stocks,” he added.
Shares in Converge ended Monday’s trading at P31.80 apiece, up by 1.76 percent from Friday’s close.
In May, the company said it expects to maintain its growth trajectory throughout the year, as the demand for broadband services continues to “explode.”
With the sustained demand for connectivity, Converge expects to end the year with about 1.6 million to 1.7 million subscribers.
Image courtesy of www.convergeict.com