Cirtek board approves hike in capital stock
CIRTEK Holdings Philippines Corp. is embarking on a capital build-up program that will set the stage for an equity infusion by a key shareholder and a possible share sale to investors.
In a disclosure to the stock exchange on Monday, Cirtek said its board of directors approved in a special meeting a plan to jack up its authorized capital stock by P300 million, 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.
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 on top of the existing 520 million common shares with a par value of P1 each and 400 million preferred A shares with a par value of 10 centavos each.
Of the increase in capital stock, major shareholder Camerton, Inc. will subscribe to 300 million preferred A shares at a par value of 10 centavos per share and 70 million preferred B shares at a par value of P1 per share.
The remaining 200 million preferred B shares may be offered to investors at a price to be approved by the board of directors.
The preferred A shares have full voting rights and will have preferred non-cumulative cash dividends at the rate of 1% of their par value per year. They will have no participation in further cash dividends which may be declared and paid to the common shares or any other class or series of shares.
The preferred B shares will be issued in sub-series or in tranches as determined by the board, which will also establish the specific terms and conditions and determine the manner by which the shares will be subscribed and paid for, such as but not limited to, a private placement transaction or public offering.
Cirtek expects to book $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.
Shares in Cirtek lost 20 centavos or 0.56% to close at P35.80 apiece on Monday.