Cirtek Holdings Philippines Corp. (CHPC) will sell its entire stake in Cirtek Electronics Corp. (CEC) to India-based Sancode Semi Private Ltd. for USD20.2 million, using part of the proceeds to cut debt and finance its remaining core operating business.
CHPC’s board approved the sale of all 155.5 million CEC shares, representing 100 percent of the electronics subsidiary, subject to customary closing conditions.
Under the agreement, Sancode will pay USD11.32 million at closing, covering about 60 percent of CEC’s outstanding shares. The remaining $8.88 million will be paid within a year, with the corresponding shares held in escrow until full payment.
CHPC plans to use part of the proceeds to partially repay outstanding bank loans and reduce debt, while channeling the balance into working capital for Cirtek Advanced Technologies and Solutions Inc. (CATSI), its principal remaining operating subsidiary.
The transaction also brings fresh investment into CEC. Sancode intends to spend an additional USD2 million on capital expenditures to upgrade equipment and expand production capacity. It will also set aside USD2.8 million for an employee benefit plan intended to retain CEC’s existing workforce.
“This transaction represents an important milestone in CHPC’s continuing effort to unlock value from its investments while strengthening our financial position,” CHPC Executive Vice President and Chief Financial Officer Brian Gregory Liu said.
Liu said the divestment would improve liquidity, reduce debt and allow the company to concentrate resources on growth opportunities. He also cited the prospect of additional foreign investment and modernization of CEC’s operations under its new owner.
CATSI President Mark Wong said the working capital infusion would help strengthen operations, improve efficiency and support expansion.
The sale marks a strategic shift for CHPC, which is seeking to shore up its finances while directing resources toward CATSI. For CEC, Sancode’s planned investment offers a path to upgrade equipment and expand capacity while retaining its existing employees.
The transaction’s completion remains subject to the agreement’s closing conditions and payment arrangements.
