PSE oks Cirtek’s $200M preferred shares offer

/ 08:00 AM November 09, 2017

Cirtek’s semiconductor production division in its Laguna hub

The Philippine Stock Exchange has approved a plan by electronics manufacturer Cirtek Holdings Philippines Corp. to offer to the public as much as $200 million worth of preferred shares, thereby becoming the second issuer of dollar-denominated securities (DDS) at the local bourse.

Cirtek’s offering, which will run from Nov. 16 to 29, will consist of up to 120 million in new non-voting, non-participating, non-convertible and redeemable preferred shares at a price of $1 per share. In case of excess demand, underwriters have the option to pitch up to 80 million additional preferred shares.


Based on the offering circular issued by the PSE, price-setting is set for Nov. 9 while tentative listing date is on Dec. 8. Projected dividend rate for the five-year preferred shares is between 5.25 percent and 6.75 percent per annum.

The preferred shares will carry a “step-up” rate of 300 basis points if not redeemed by Cirtek in five years. As such, the issuer is expected to retire these securities to avoid paying higher rates


BPI Capital was mandated as the sole issue manager and bookrunner for this equity deal. It also acts as joint lead underwriter together with RCBC Capital.

Proceeds from this offering are intended to fund Cirtek’s future growth and pare debt after its acquisition of US-based antenna solutions provider Quintel, the Philippine firm’s ticket to Silicon Valley. Cirtek is grooming Quintel for listing on the Nasdaq within five years, during which the company’s revenues were expected to breach as much as $1 billion.

The PSE’s DDS rules allow listed companies to issue a new set of securities – either common or preferred shares – which are quoted, traded, and settled in US dollars. This will provide listed companies the venue to raise new capital in US dollars to meet their dollar needs. It also gives investors with dollar holdings an investment vehicle that could provide viable returns.

There are currently a dozen PSE trading participants eligible to distribute and trade DDS: AP Securities, Armstrong Securities, Astra Securities, BA Securities, BDO Securities Corp., First Metro Securities Brokerage Corp., Mandarin Securities Corp., Philippine Equity Partners, Sunsecurities, Venture Securities, The First Resources Management and Securities Corp. and Wealth Securities.

This marks the second listing of DDS in the local stock exchange after the pioneering transaction by Del Monte Pacific Ltd. last April.

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TAGS: CHIPS, cirtek, DDS, dollar-denominated securities, PSE
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