Semiconductor maker cuts IPO size to P295M

MANILA, Philippines—Semiconductor manufacturer Cirtek Electronics Corp. has scaled down its planned initial public offering as it announced the timetable for selling shares to investors amid lingering volatility in local and international markets.

In a memorandum filed with the Philippine Stock Exchange, the Laguna-based firm said that it was now planning to raise P295 million from its IPO—much lower than the P660 million it had secured approval for from the Securities and Exchange Commission last month.

Under the revised terms, Cirtek said it would sell 42.1 million shares to investors at a price of P7 each. This was lower than its original plan of selling 61.8 million shares at P10.68 each.

The Cirtek group plans to embark on a three-year expansion program to increase business and to further expand its customer base.

The expansion program will require the construction of a third building at its current manufacturing complex in Biñan, Laguna, that will add 180,000 square feet of manufacturing space.

In its regulatory filing, Cirtek said the net proceeds would be used primarily for the acquisition of machinery and equipment as well as for general working capital requirements.

The company told the bourse that it planned to list a total of 162.1 million shares, post-IPO, which would make the total public offering equivalent to 26 percent of its outstanding capital stock. Under its original proposal, the public component of its outstanding shares could have run to as high as 34 percent.

The shares will be sold exclusively to the local market, with 70 percent of the shares going to underwriters’ clients, 20 percent to trading participants and 10 percent to local investors.

Cirtek also told the bourse that the offer period would run from Nov. 8 to Nov. 14, 2011, with the listing date set for November 18.

No reason was given for the downscaling of the firm’s IPO size, but one of Cirtek’s underwriters had earlier indicated that pricing and timing would be dictated by market conditions.

According to the company, its public offering would be handled by Unicapital Inc. as issue manager and lead underwriter, with Philippine Commercial Capital Inc., Multinational Investment Bancorporation and Vicsal Investments as joint underwriters.

Cirtek is owned by Taiwanese-Filipino businessman Jerry Liu, who also leads the Figaro coffee and Angel’s pizza chains.