The board of semiconductor firm Cirtek Holdings Philippines Corp. has approved the company’s stock rights offer with a bonus detachable warrant for each rights share.
In its disclosure to the Philippine Stock Exchange, the company said it will issue up to 250 million in common shares.
At Monday’s close of P5.70 per share, the company can raise as much as P1.42 billion from the exercise.
A stock rights offer allows existing common shareholders to buy additional shares of the company in proportion to their holdings. A detachable warrant, meanwhile, is a derivative that is attached to a security which gives the holder the right to purchase the underlying asset at a specific price within a certain time frame.
Cirtek said that before the stock rights offer exercise, the company will have to increase first its authorized capital stock, which the board also approved during its special meeting on Monday, to accommodate the new shares.
Cirtek’s board also approved the amendment of article four of its articles of incorporation on corporate terms from 50 years to perpetual term.
The company said its officials will have to fix the terms and conditions of the rights offer, including the entitlement ratio, the offer price, the payment terms, the terms of the detachable warrant including the exercise price, the procedure for lodging the application to subscribe, the details and procedures for the various rounds of offer, among others.
Cirtek’s board earlier this month also approved the company’s issuance of preferred shares which will be made through private placement.
It will put up for sale some 33 million of its preferred B2 sub-series shares through private placement to qualified buyers. It has set the price for the said sale at $1 per share.
The said shares will come from the unissued existing preferred B2 shares. The first tranche of the said shares were issued in 2017 consisting of 67 million shares.
Preferred shares are non-voting but holders have priority over common stockholders when it comes to dividends, which is commonly higher than those given to common stockholders.
Cirtek said its net income more than doubled in the first six months of the year to $4.98 million from last year’s $2.28 million, despite a decline in revenues.
The company said it had consolidated revenues of $42.3 million for the period, some 13 percent lower than last year’s $48.64 million.
“The decrease accounted for was mainly due to the 25-percent decrease in revenue contribution of Quintel, a US-based product and R and D (research and development) company acquired in 2017 and 12 percent decrease in revenue contribution from semiconductor business,” the company said.