The Philippine Stock Exchange has approved the planned initial public offering this October of Laguna-based electronics manufacturing firm Cirtek Holdings Philippines Corp. that will raise as much as P660 million for the company.
In a memorandum on Friday, the PSE said its board had approved the offering of up to 61.82 million primary common shares to the public at an indicative offer price of up to P10.68 per share.
The offering will bring to public hands 34 percent of Cirtek’s shares after the IPO, which will give it a market capitalization of up to P1.94 billion upon the listing of as much as 181.82 million shares on the local bourse.
This will be a purely domestic offering, which will run from Oct. 10 to 14, while the listing of shares on the PSE’s main board is tentatively scheduled for Oct. 21.
Proceeds from the offer will be used for the acquisition of new machinery and equipment as well as for general working requirements.
Cirtek has appointed BDO Capital & Investment Corp. as issue manager and lead underwriter.
The electronics manufacturing firm 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, which will add 180,000 square feet of manufacturing space and the acquisition of new equipment and machinery to increase production capacity.
Cirtek is owned by Taiwanese-Filipino businessman Jerry Liu who also leads the Figaro coffee and Angel’s pizza chain.
The company has reported consistent profitability in its 26 years of operation, thus beating the three-year track record required for listing on the PSE.
The electronics manufacturer has two factory buildings in Laguna, one of which has 81,000 square feet in manufacturing space and the other, 71,000 sqf.
Apart from raising fresh funds, going public is seen boosting Cirtek’s branding in the international markets and allowing it to bag more contracts.
In an interview, Cirtek chief finance officer Anthony Buyawe said that at the indicative price of P10.68 per share, the company would sell shares at 10 times projected earnings, which he noted was an attractive valuation relative to its peers in the region, some of which were now trading at between 10 and 14 times earnings per share.
In 2010, Europe accounted for 47 percent of Cirtek’s market while the United States and Asia accounted for 47 percent and 19 percent, respectively.
But this year, Buyawe said business in Asia was growing at a much faster pace, particularly in markets like China, Taiwan, Korea and Japan.