Cirtek to sell semiconductor arm for US$20.2 million
Indian buyer Sancode Semi will make two cash payments, while Cirtek intends to direct proceeds towards debt and capital needs.
Cirtek Holdings Philippines Corp. has announced board approval for a US$20.2 million disposal of its semiconductor subsidiary to India’s Sancode Semi Private Ltd. Cirtek said the funds would support capital expenditure and help reduce its borrowings.
The transaction covers 155.51 million common shares in Cirtek Electronics Corp. (CEC), equivalent to 100 per cent of its capital stock. Mumbai-based Sancode, a Sancode Group subsidiary, will pay US$11.32 million at closing and the remaining US$8.88 million after a year.
Cirtek is seeking to rebuild its finances following damage from higher US tariffs. Brian Gregory Liu, its executive vice president and chief financial officer, said the money would go towards loans nearing maturity and reducing debt.
Proceeds will also help fund working capital at the remaining subsidiary, Cirtek Advanced Technologies and Solutions Inc. (CATSI). The electronics manufacturer supplies turnkey solutions for automotive, satellite, semiconductor and telecommunications customers.
CATSI president Mark Wong said the funding would support planned expansion to serve future demand, as well as efforts to improve efficiency and pursue new market opportunities.
Separately, Sancode is spending US$2 million on CEC equipment upgrades aimed at increasing operating capacity. It is also investing US$2.8 million in an employee benefit scheme intended to retain CEC’s entire workforce.
