Electronics and wireless broadband manufacturer Cirtek Holdings Philippines Corp. saw its recently-capped follow-on offering 1.5 times oversubscribed.
At the close of the offer period last Wednesday, P2.2 billion was raised from Cirtek’s follow-on offering, which was 1.5 times oversubscribed despite market volatility and the uncertainties from global macroeconomic concerns.
A total of 110 million shares of base offer and oversubscription allotment, priced P20 each, were offered to the public from October 28 to November 4.
“Cirtek’s follow-on offering successfully attracted both institutional and retail investors, resulting in an oversubscription for the issue. In order to meet the strong demand and to provide aftermarket liquidity, we decided to exercise 30 million shares from the oversubscription option,” said Roberto Juanchito Dispo, president of First Metro Investment Corp. (FMIC).
FMIC is the issue manager, bookrunner and one of the lead underwriters alongside SB Capital Investment Corp.
Net proceeds of P1.6 billion from the base offer will go to strategic acquisitions, capital expenditures, loans payments, and working capital.
“This transaction marks Cirtek’s successful return to the equity market after its P300 million initial public offering in November 2011. The enthusiastic reception by the market validates our belief in the fundamental strength of the company. It has a solid organization, world-class technology, and is well-positioned in a fast-growing market. Due to all these factors, Cirtek is expected to continue providing superior returns for its investors for a long time,” Dispo added.
“We are very happy with the results of the offer. The strong demand from investors and the overall success of this transaction highlight the market’s trust and confidence in Cirtek, its capabilities and its prospects moving forward,” Cirtek Chairman Jerry Liu said.
The shares are slated for listing tomorrow, November 10, on the Philippine Stock Exchange.
The company aims to expand its business by developing its own products and brands and becoming a complex open equipment manufacturer (OEM) that sells finished products, aside from its present operations of open-source-appropriate technology (OSAT) where Cirtek’s designs can be used, modified and distributed freely.
The firm sees robust growth moving forward as it views that the global semiconductor industry will grow between 5 percent and 8 percent for the whole of 2015 on the growth of iPhones android phones, tablets, PCs and TVs, as well as automotives.
Cirtek manufactures semiconductors and electronics, as well as radio frequency products used in communication devices. It exports 100 percent of its products to Asia-Pacific (21 percent), Europe (33 percent) and North America (46 percent).
The company grew its revenues at an average of 17 percent from 2009 to 2014, compared with the industry average of 5.3 percent.