Converge looking at raising additional debt in second half

Converge Information and Communications Technology Solutions Inc. on Monday hinted at the possibility of raising additional debt in the second half of the year, with the firm set to spend up to P28 billion this year.

According to Chief Financial Office Advisor Matthias Vukovich, the P26 billion to P28-billion capital expenditure program will be funded by a mix of operating cash flows and additional debt.

“We are well covered into the second half of the year, but we will probably raise additional debt in the latter half of the year,” he told reporters in a virtual briefing.

“This could be again tapping into the remaining P10-billion shelf facility or drawing down from our banks. We have very attractive terms on both ends,” he continued.

With interest rates anticipated to be hiked amid the inflationary uptick, Vukovich said there are no plans to raise additional equity at this point and prepay the existing debt which is close to 90% fixed in nature.

“Even in the rising interest rates environment, it will not impact our existing debt so at this point we’re not looking at prepaying our existing debt,” he said.

Converge’s net income after tax stood at P1.970 billion in the first quarter of the year, up from the P1.549 billion recorded the same quarter in 2021. This translates to a net income margin of 25.4%.

Revenues for the quarter posted a 39.7% growth, with residential revenue up 42.0% on the back of subscriber growth which hit 187,594 to bring the residential count to over 1.8 million.

“We had a good start into the first quarter but at this point we’re not making any revisions to our guidance,” Vukovich said.

Moving forward, Converge is looking to tap more areas across the country, with Abra, Aklan, Ifugao, Negros Oriental, South Cotabato, and Davao Del Norte set as its next expansion areas.

It has also soft launched in Kalinga, Leyte, Negros Occidental, and Bohol.

Shares in Converge were up P1.05 or 3.78% at P28.80 as of 11:53 a.m. on Monday.—AOL, GMA News