Cirtek to offer dollar-denominated securities

By Krista Angela M. Montealegre, National Correspondent

CIRTEK Holdings Philippines Corp. is selling dollar-denominated securities in a public offering this year to boost its war chest for expansion.

In a disclosure to the stock exchange, the Laguna-based technology firm said it will raise as much as $200 million from the sale of 200 million preferred B-2 shares at $1 per share.

The preferred B-2 shares will be offered to the public in US dollars pursuant to the Philippine Stock Exchange’s Rules on Dollar Denominated Securities.

“This will benefit the corporation as it will be able to address its funding requirements without incurring foreign exchange risks,” Cirtek said, noting that its functional currency as an export-oriented company is in US dollars.

This will make Cirtek the second company to issue dollar-denominated securities after Del Monte Pacific Ltd. raised $200 million in March.

The offering and listing of the preferred shares will take place “within the year,” Cirtek Chief Finance Officer Anthony S. Buyawe said in a mobile phone message.

The preferred shares will come from a planned P300-million increase in its authorized capital stock, a partial implementation of a capital stock hike cleared by the company’s shareholders last May of up to P2 billion from the existing P560 million.

“Increasing the company’s authorized capital puts Cirtek in a position to raise the appropriate funding required for its expansion programs and operation,” Mr. Buyawe said.

The expanded capital stock will pave the way for the creation of additional 700 million preferred A shares with a par value of 10 centavos each and 270 million preferred B shares with a par value of P1 each.

Cirtek expects to book between $120 million to $125 million in revenues this year, driven by the additional capacity of its Laguna plant and contributions from newly acquired tech firm Quintel.

Cirtek’s earnings rose by a third to $4.7 million in the first half of 2017 from $3.5 million on the back of a 30% jump in revenues.