By Emmie Abadilla
Global investment firm KKR and Chinese internet service provider Tencent Holdings Ltd. are subscribing to US$175 million worth of newly-issued shares in Voyager Innovations, the digital technology arm of PLDT Inc.
(MANILA BULLETIN)
The transaction, expected to be closed within the fourth quarter of 2018, still leaves PLDT as the majority shareholder of Voyager, PLDT disclosed last night (Oct. 4, 2018) after the telco's board of directors approved the investments in a special meeting.
The agreement among the companies also contain provisions for Voyager Innovations to issue additional shares to other investors which could reduce PLDT’s ownership to less than 50% while still remaining as the largest shareholder.
The new external funding in Voyager marks the largest investment to date in a Philippine technology company.
With the global expertise and fresh capital from the new investors, Voyager will enable greater access to mobile payments and the internet as a whole for the country’s population.
Voyager aims to hasten digital and financial inclusion in the Philippines, enabling the broader Filipino population to participate in the digital economy.
The company’s technology platforms support the PayMaya prepaid payment wallet, PayMaya Business, a mobile acquiring service enabling enterprises to accept digital payments, Smart Padala, amobile-based remittance network, Lendr digital lending platform and freenet, a rewards app for free access to local internet and apps.
“Having global powerhouses such as KKR and Tencent as investors in Voyager Innovations demonstrates not only their confidence in the company’s ability to execute its vision but also their confidence in the Philippine technology industry as a whole,” according to Manuel V. Pangilinan, Chairman, President, and CEO of PLDT.
“This is a watershed moment not only for Voyager Innovations but also for the Philippines," concurred Orlando B. Vea, President, and CEO of Voyager Innovations. "We will trigger an inflection point in digital adoption and financial inclusion in the country.”
"We look forward to leveraging our industry expertise and resources to help enhance Voyager's mission of financial inclusion and accelerate its growth at a time when the digital economy is more important than ever,” remarked Terence Lee, Director on KKR’s Southeast Asia team.
KKR’s investment in Voyager Innovations is being funded from KKR Asian Fund III.
The investment is KKR’s first private equity investment in the Philippines and is part of the firm’s strategy to invest in high-growth markets that the firm believes can benefit from a rapid increase in technology adoption.
Other investments KKR has made in the technology and fintech sectors include Go-Jek (Indonesia’s leading on-demand mobile platform for ride hailing, food delivery, and mobile payments), Suishou Technology (one of China’s largest personal finance management platforms) and First Data (global payment technology and services solutions provider with a presence in 118 countries).
For his part, James Mitchell, Chief Strategy Officer of Tencent, noted, “Voyager connects the growing smartphone population in the Philippines to online payments and financial services. We are glad to support it and to advance financial inclusion.”
Notably, KKR and Tencent's investment in Voyager is not subject to the compulsory merger notification regime under the Philippine Competition Act and its Implementing Rules and Regulations.
In addition, the Bangko Sentral ng Pilipinas has confirmed it interposes no objection to the investment.
Bank of America Merrill Lynch is acting as financial advisor to Voyager Innovations. Latham & Watkins and Picazo Buyco Tan Fider & Santos are acting as legal counsel to PLDT and Voyager Innovations. Paul, Weiss, Rifkind, Wharton & Garrison, and Sycip Salazar Hernandez & Gatmaitan are acting as legal counsel to KKR and Tencent.