Cirtek drops BDO Capital as underwriter for IPO

MANILA, Philippines – A semiconductor company planning to offer its shares for the first time to the public has dropped the investment banking arm of the SM Group as its underwriter.

Cirtek Holdings Philippines Corp. told the Philippine Stock Exchange on October 28 that it is pushing through with its plan to conduct its initial public offering on November 8.

Anthony Buyawe, Cirtek chief financial officer, told the local bourse that the fund raising exercise will be “firmly underwritten” by a syndicate composed of Unicapital Inc. as issue manager and lead underwriter with Philippine Commercial Capital Inc., Multinational Investment Bancorporation and Viscal Investments Inc. as joint underwriters.

BDO Capital & Investments Corp. used to be the issue manager and lead underwriter for Cirtek’s IPO.

On October 7, the investment house’s president, Eduardo Francisco, told reporters in an interview that the semiconductor firm was still working on its papers for its debut at the PSE. BDO Capital, as its lead underwriter, thought it would have been best to wait for the perfect time to conduct the offering since it would be too costly for any company to enter “this very bad market.”

Then on the sidelines of the Economic Journalists Association of the Philippines Journalism Awards ceremony on October 25, Francisco said that BDO Capital was mulling the deferment of the IPO to January or the first quarter of next year, citing the “very” volatile market” given the uncertainties in the world economy that was in danger of going into a double-dip recession.

Interarksyon tried to get Francisco’s side regarding BDO Capital’s absence in the roster of underwriters but he could not be reached as of this posting.

The latest company to test the murky market was Puregold Price Club Inc., which listed its shares on October 5. The supermarket chain’s stock price tanked to P10.68 per share a day after its debut at the PSE as investors deemed the offer price of P12.50 was expensive and because of the turbid market. PGOLD’s price managed to claw its way back up to P12.38 as of October 28.

According to documents submitted to the PSE, Cirtek plans to sell 42.2 million common shares for P7 apiece until November 14. Target date for the listing of these shares is November 18.

The number of shares and the initial offer price are lower than the 61.82 million shares, representing up to 34 percent of Cirtek, and the maximum price of P10.68 the company indicated in its IPO application with the Securities and Exchange Commission.