Cirtek to brave stock market next month for listing debut

CHIPMAKER CIRTEK Holdings Philippines Corp. plans to hold its initial public offering (IPO) next month, upbeat that Asian growth amid a downturn in its main markets in the West will continue to lure investors.

“We expect to come up with a final price by the end of the month, and list around mid-November,” Antonio Callueng, Cirtek senior sales and marketing director, said in a briefing yesterday. Last month, Cirtek postponed its Oct. 21 IPO, citing poor market conditions.

Cirtek is looking to raise as much as P660 million from selling 61.8 million new common shares at as much as P10.68 apiece during its debut on the local bourse, representing approximately 34% of the company’s issued and outstanding capital stock.

As much as P260 million will be used for assembly equipment acquisition, while P185 million will be allotted as working capital, P150 million for building and expansion improvement, and P30 million for facility improvements.

Even if Europe nearly captures a majority of Cirtek’s sales at present, a slowly growing Asian market is poised to boost the sales heading into next year, Cirtek Chairman and President Jerry Liu said.

“We are optimistic. The growth in the Asian markets can compensate for the downturn in European markets,” Mr. Liu said, citing sales prospects in countries such as Japan, Korean, and Taiwan.

Europe grabbed 47% of the company’s sales last year, while the United States cornered 35%.

Asia, meanwhile, garnered the balance, the Laguna-based firm said.

Nevertheless, Cirtek expects to realize at least $40 million in revenues this year versus $34 million last year, and begin expansions in mid-2012, Mr. Callueng said.

So far, it has realized $1.58 million in net income in the year’s first six months and $18.34 million in sales, according to company data.

Cirtek recently bagged a million-dollar contract with Fagor Electronica, the semiconductor arm of Spain-based company Mondragon Corp., Mr. Liu said.

“We see a lot of opportunities for the company, and to capture these, we need more funds,” said Anthony S. Bugawe, Cirtek chief financial officer.

At present, its two existing buildings are capable of producing one billion semiconductor chips combined. The planned third building will have a bigger capacity of one billion chips and is expected to create an estimated 200 to 300 jobs, Mr. Callueng said.