LISTED fiber internet provider Converge ICT Solutions, Inc. announced on Monday that it will soon be traded over the counter in the United States financial markets in the form of unsponsored American Depositary Receipts or ADRs.
Citing a filing with the US Securities and Exchange Commission, Converge told the local bourse on Monday that “the total American Depositary Shares (ADS) registered amounted to 50 million ADS for a maximum offer price of $5 each or a total aggregate offering price of $2.5 million,” or approximately P125 million.
“An ADR is a negotiable security that represents securities of a foreign company and allows that company’s shares to trade in the US financial markets,” Converge noted.
“ADRs represent an easy, liquid way for US investors to own foreign stocks. An unsponsored ADR is an ADR issued by a depositary bank without the involvement, participation, or consent of the foreign company it represents ownership in.”
Given that Converge has no participation in the issuance, it is expected to have no direct impact on the company, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a phone message when sought for comment.
“We may watch out how these unsponsored ADRs will be received by the market. If there is strong demand seen, then it would reflect robust confidence towards the company,” Mr. Tantiangco added.
In an e-mailed statement, Dennis Anthony H. Uy, chief executive officer and co-founder of Converge, said: “We welcome this development as it opens up another channel for US investors to invest into Converge shares. This signals the confidence of an increasing number of investors in the continued strong growth of the company as we continue to reach the unserved and [underserved] areas in the Philippines.”
Converge aims to cover 55% of Philippine households by 2025. It recently launched its services in Cebu province and Davao City.
The company is also expanding the rollout of its fiber optic cables in the Cordillera Autonomous Region from Benguet province to Kalinga and Mountain Province.
According to its latest data, Converge has reached 32.5% coverage, or 8.3 million homes, in the Philippines as of end-June 2021.
Converge shares closed 0.14% lower at P34.45 apiece on Monday. — Arjay L. Balinbin