Cirtek to sell chip unit to Indian buyer for $20.2 million as it cuts debt

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Cirtek sells chip unit for $20.2M

Highlights

Cirtek will sell all 155.51 million shares of Cirtek Electronics Corp. to India's Sancode Semi Private Ltd. for $20.2 million, with $11.32 million due at closing and $8.88 million within one year.
Sancode plans $2 million in capital expenditures to upgrade CEC's equipment and $2.8 million for an employee benefit program to retain CEC's workforce.
Cirtek shares jumped 24.17% to P1.49 following the deal announcement, reflecting positive investor sentiment driven by debt reduction and fresh working capital for CATSI.

Sale structure and funding plan

As reported by BusinessWorld Online, Cirtek said in a stock exchange filing on Monday that its board approved the sale of all 155.51 million shares in Cirtek Electronics Corp., representing 100% of the unit's outstanding capital stock, to India's Sancode Semi Private Ltd.

Sancode is set to pay $11.32 million at closing for about 60% of the shares, with the remaining $8.88 million due within one year. Cirtek said the shares covered by the second tranche will be placed in escrow until full payment is completed, and the transaction remains subject to customary closing conditions.

Executive Vice-President and Chief Financial Officer Brian Gregory Liu said the deal marks a step in Cirtek's effort to unlock value from its investments while strengthening its financial position. The company plans to use part of the proceeds to repay bank loans and allocate the balance to the working capital needs of Cirtek Advanced Technologies and Solutions, Inc., or CATSI.

Operational impact and expansion plans

Beyond the acquisition price, Sancode plans to invest an additional $2 million in capital expenditures to upgrade CEC's equipment and expand capacity. The Indian buyer also intends to set aside $2.8 million for an employee benefit program designed to retain CEC's workforce.

CATSI President Mark Wong said the expected infusion of working capital will help support ongoing operations, growth initiatives and customer service. Cirtek operates through CATSI, which provides design, engineering, manufacturing, testing and supply chain services for electronic equipment focused on radio frequency, microwave and millimeter-wave technologies.

Investor sentiment appears positive after the announcement, with Cirtek shares rising 24.17% to P1.49 each.

In our earlier coverage of Equites Property Fund’s accelerated UK exit and Aviva portfolio sale, we detailed how the REIT used disposals to lift its interim distribution while cutting leverage and reaffirming FY27 guidance. We also noted that the freed-up capital and liquidity were being redirected into South African logistics growth, supported by a stronger funding position and ongoing asset recycling.

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