Cirtek sells semicon unit to Indian firm for 20.2 million dollar

MANILA, Philippines — Jerry Liu’s integrated tech provider Cirtek Holdings Philippines Corp. has sold its semiconductor arm to an Indian firm for at least $20.2 million to fund capital and debt expenditures.

Cirtek announced yesterday that its board of directors has approved the sale of Cirtek Electronics Corp. (CEC) to Mumbai-based innovator Sancode Semi Private Ltd., a subsidiary of the Sancode Group.

The sale, valued at $20.2 million, or nearly P1.3 billion, will unload CEC from Cirtek as it tries to recover financially after taking a sharp hit from higher US tariffs.

Sancode will take over the 155.51 million common shares covering 100 percent of CEC’s capital stock. The buyer will also pay Cirtek in cash in two tranches.

Sancode will pay Cirtek the first tranche, valued at $11.32 million, upon closing. The second and final tranche, amounting to $8.88 million, will be paid a year later.

For Cirtek, the sale provides fresh capital to finance capital expenditures and pay down debt, allowing it to reorganize the business for future growth.

Cirtek executive vice president and chief financial officer Brian Gregory Liu said the company would use proceeds from the sale to pay off expiring loans and reduce debt.

Likewise, Cirtek will allocate part of the proceeds to support the working capital of its remaining subsidiary, electronics manufacturer Cirtek Advanced Technologies and Solutions Inc.

CATSI president Mark Wong said the fresh capital from Cirtek would fund expansion plans to meet future demand. The company provides turnkey solutions to four industries, namely, automotive, satellite, semiconductor and telco.

“CATSI will be in a better position to improve operational efficiency and capitalize on emerging market opportunities. We look forward to leveraging the additional resources to support our next phase of growth,” Wong said.

Sancode is spending an additional $2 million to upgrade CEC’s equipment bank to improve operational capacity.

On top of this, Sancode is investing $2.8 million for an employee benefit plan designed to ensure the full retention of CEC’s workers.