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Cirtek is gearing up for IPO

Cirtek is gearing up for IPO

published: June 20, 2011 @ PhilStar by: Donnabelle L. Gatdula



                    Main Building

MANILA, Philippines – Aside from being one of the most resilient and oldest semiconductor assemblers in the country, Cirtek Holdings Philippines Corp. (Cirtek) will set another record of being the first semiconductor firm majority-owned by Filipinos to go public.Cirtek senior director for sales and marketing Antonio Callueng says the company, having been in the business since 1984, has outstanding track record to back up its plan to list its shares at the Philippine Stock Exchange (PSE).

Having survived without debts, Callueng notes that Cirtek intends to raise some $50 million to finance its aggressive expansion program in the near-term.

“Our plan is to continue to expand this company in the next years and this would be made possible by allowing its shares to be offered to the public,” he says.

Proceeds from the offering will be used by Cirtek to acquire new machineries and equipment to support the company’s three-year expansion program. Portion of the funds to be raised from the initial public offering (IPO) would also be utilized as the company’s new working capital.

Specifically, the company is planning to put up a third building in its 67,000 to 70,000-square foot property that sits in the sprawling Laguna Technopark in Binan, Laguna.

The IPO, which will involve the offering of 62 million common shares or about 30 to 40 percent of the company’s shares of stock at about P10.64 per share, is envisioned to be carried out within the third quarter of this year.

To be lead arranged by BDO Capital & Investment Corp., the IPO is expected to be worth more than P658 million.

Callueng points out that it has always been Cirtek’s philosophy to be involved in the early stage of customer’s die design and conceptualization stage to the building of prototype products.

“Our more than 20 years of engineering expertise in package and test program development, coupled with our very good relationship with our tool suppliers, allows customers to build small engineering lots or prototypes before embarking on mass production,” he says.

Cirtek, he says, believes that giving much focus to customers’ satisfaction by putting more attention to detail and quick response time helped in creating new designs and package development for its existing client base and several start-up companies.

“This gives our customers the competitive edge to introduce their products faster to their market,” he notes.

The company through its subsidiaries is an independent complete solution provider for subcontract manufacturing of semiconductor devices.

At present, it provides turnkey solutions that include package design and development, wafer probing, wafer back grinding, assembly and packaging, final testing of semiconductor devices, and delivery and shipment to its customers’ end users.

Pursue various business strategies

Mindful of the competitive nature of the assembly and testing segment of the semiconductor industry, the company says it intends to pursue various business strategies such as offering customer oriented products and solutions; pursuing internal organic growth; offering dedicated or captive line models; constantly reviewing and making innovations in its production and assembly techniques and capabilities; and pursuing mergers and acquisitions.

Since its inception, more than 26 years ago, the company, which has developed world-class quality products, started only with less than 20 people in its roll, now its workforce has grew to about 1,500.

Cirtek has two other subsidiaries namely: Cirtek Electronics Corp. (CEC) and Cirtek Electronics International Corp. (CEIC).

The company currently offers wide range of products in various applications and industries, including communications, consumer electronics, power devices, computing, automotive and industrial.

CEC, being a PEZA-registered enterprise, is entitled to the five percent gross income tax (GIT) incentive, as defined under Republic Act (RA) 7916, the law creating the PEZA. On May 11, 2012 PEZA granted pioneer status to the company’s new project. The new project involves new packages produced by the company using of new assembly processes and technology applications.

Total sales of the company increased by 12 percent to $7.4 million in the three months ending March 2011 to $6.6 million for the same period in 2010.

CEC was incorporated with the SEC on May 31, 1984, primarily to engage as an independent subcontractor for semiconductor assembly, test and packaging services.

Prior to Cirtek’s acquisition of CEC in 2011, CEC was majority-owned by Charmview. In 2008, Charmview and CHI entered into a share swap agreement whereby Charmview transferred all of its interest in CEC to CHI in exchange for shares of stock of CHI. As a result of the share swap, CEC became a subsidiary of CHI.

On April 20 2011, the company filed another PEZA application for the registration of a new project involving the manufacture of devices which will be used as components for smart phones, automotive sensor applications, battery chargers, and industrial applications.

CEIC, on the other hand, was incorporated under the International Business Companies Act of the British Virgin Islands on April 4, 1995. CEIC was incorporated with the primary purpose of selling integrated circuits principally to the US.

Prior to the company’s acquisition of CEIC in 2011, CEIC was majority-owned by Charmview. In 2008, Charmview and CHI entered into a share swap agreement whereby Charmview transferred all of its interest in CEIC to CHI in exchange for shares of stock of CHI. As a result of the share swap, CEIC became a subsidiary of CHI.



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