Cirtek plans to hold IPO
Semiconductor exporter Cirtek Electronics Corp. may hold its initial public offering (IPO) by the middle of November this year.
The company plans to raise P660.8 million, with its shares carrying an indicative price of P10.68 each. Proceeds of the share sale will be used to partly fund the construction of a new manufacturing facility at the company’s Laguna complex.
“We see a lot of opportunities and we will be able to take advantage of that by going public,” Cirtek chief financial officer Anthony Albert Buyawe said.
He said that over the past decade, the company has been comfortable growing organically.
“Now we need more funds than we can generate so we have to tap the capital markets,” Buyawe said. The exact date of its offering will depend on the broader market’s performance.
After the offering, about 34 percent of the company’s stock will be held by public investors. The entire offer size will be composed of primary common shares, with none of the existing owners choosing to “cash in” just yet.
“All of this money is going to the company,” Buyawe said.
The company’s expansion program, which was unveiled last month, will entail the construction of a third building at its current manufacturing complex in Biñan, Laguna. This will add 180,000 square feet of manufacturing space.
Cirtek is owned by Taiwanese-Filipino businessman Jerry Liu who also leads the Figaro coffee and Angel’s pizza chain. It reported consistent profitability in its 26 years in operations. The requirement for listing is a track record of only three years.
This year, the company expects to post a 16.7-percent increase in profit to about $4.2 million from $3.6 million last year, despite the downturn in the world electronics market.
Buyawe said the bulk of the company’s growth now comes from booming Asia-Pacific economies, not the gloomy markets of the US and Europe.
He said that being a listed firm would improve the company’s credibility and image, which would allow it to get more customers from abroad.
“Our clients, these are big listed companies and they also like dealing with other listed firms,” Buyawe said.
Cirtek, which has about 1,400 employees, ships out 18-20 million semiconductor device units per week for the communications, networking, computing, industrial and automotive industries.
