Cirtek gets go-signal for P2.9-B follow-on offer

MANILA, Philippines - Cirtek Holdings Philippines Corp, a Laguna-based manufacturer of integrated technology products, has received the go-signal from the Securities and Exchange Commission (SEC) to proceed with its P2.88 billion follow-on offering.

A follow-on offering is an issuance of stock that is subsequent to a company’s initial public offering.

Proceeds would be used for general funding needs as the company seeks to expand its business portfolio  through the development of its own products and brands, with a focus on high-growth industry segments such as wireless communication and mobile devices and applications, and online and mobile solutions such as e-commerce.

Based on a maximum offer price of P24 each share, Cirtek expects to raise about P1.92 billion from the sale of 80 million shares.  In case of strong demand, an additional 40 million shares have been allotted for the greenshoe option.  This would bring total proceeds from the share offering to as much P2,88 billion.

Of the estimated P1.92 billion proceeds, the company has set aside P630.7 million to fund strategic acquisitions, P631.9 million for capital expenditures, P278.2 million to settle its financial obligations and P314 million for its working capital requirements.

In August, Cirtek reported a net income after tax of $3 million, higher than the $2.1 million posted in the same month last year.

For the first half, consolidated net sales rose to $28.3 million from $22.8 million in same period a year ago.

The growth was driven by sales from its business of radio frequency, microwave and millimeter wave.

In terms of revenue by application, the company estimates at least 50 percent of its output for the first semester went to communication, 20 percent to consumer electronics, 10 percent to computing, 10 percent to industrial and 10 percent to automotive.

“Cirtek continued to focus on process and materials engineering activities in order to create innovative and cost-effective solutions to customers,” it said.

In the Philippines, the company is a pioneer in the Gallium Nitride (GaN) wafter technology that is used in various applications such as telecom, wifi, data, network, satcom, broadband, and consumer RF applications.

GaN technology refers to the use of Gallium Nitride as a semiconductor material that offers high level of mechanical stability, hardness, heat capacity and thermal conductivity, and very low sensitivity to ionizing radiation, thereby permitting devices to operate at much higher voltages, frequencies and temperature.

Through subsidiary Cirtek Advanced Technology and Solutions (CATS), the company continues to maintain its position as the leading global supplier of millimeter wave products.

The global semiconductor industry is forecast to grow between five and eight percent this year, to be driven largely by the iPhone supply chain and automotive market. Sales of android phones, tablets, PCs and TVs, are also expected to increase.