THE Securities and Exchange Commission (SEC) has approved the $200-million preferred shares issuance of Laguna-based chip maker Cirtek Holdings Philippines Corp.
According to its registration statement, Cirtek’s primary offering includes 120 million shares and 80 million shares as an oversubscription option at $1 apiece.
Assuming all of its shares were sold, the company said some $66.1 million will be used to pay off loan, another $66.1 million will fund its acquisitions, some $25.8 million each will be used for capital expenditures and for working capital and $14.55 million for research and development.
It said some $40 million will be used to pay off its debts to various local banks including a $30-million promissory note taken from Security Bank, China Bank Corp. and Metropolitan Bank and Trust Co.(Metrobank). The rest will be for the outstanding five-year loans it took from Bank of the Philippine Islands and Metrobank, which both carry an interest rate of 3.6 percent annually.
“The company’s acquisition strategy is to focus on leading technologies, which should generate higher margins,” it said, adding that additional acquisition should happen by next year. The preferred shares are non-voting, cumulative, nonparticipating, nonconvertible and will be called Preferred B-2 Shares.
Cirtek earlier said proceeds from the offer will fund-expansion plans, including those for newly acquired Quintel Techology Ltd. and pay for debts. Cirtek added it is confident it could secure a substantial share of the fast-growing base-station market using Quintel, a United States company that it recently acquired that manufactures antennas used by telecommunications companies.
Quintel, which claims to be a leader in the high-value, multiport antenna market in North America, is also looking to increase its market share in the US to 30 percent, from the current 10 percent, by securing new clients and introducing new products, as well as low-cost antennas starting in 2018. Its revenues for such an initiative could top $100 million by next year, or the same pace of revenue being generated by Cirtek before it acquired Quintel.
Cirtek hopes to list Quintel in the US when its revenues reached $200 million.
Quintel is also looking to roll out those low-cost, six-port platforms to Southeast Asia, including the Philippines, to help telecommunications companies in the region quicken their network rollout.