Cebu Pacific to raise US$ 500m fresh capital

Manila – Philippine budget carrier Cebu Pacific (CEB) is seeking to raise US$500 million in additional capital to beef up its balance sheet so as to weather the pandemic storm.

CEB told the Philippine Stock Exchange that it will seek approval for the issuance of US$250 million in new convertible preferred shares, as well as another US$250 million in privately placed convertible bonds.

The airline envisions that the capital raising exercise will be taken up in a special shareholders meeting on November 20, 2020.

The convertible preferred shares will be made available to all stockholders, including parent and 67 per cent owner of CEB, JG Summit Holdings (JGSHI); while the convertible bonds will be offered to select international investors, the airline said in a press release.

“We need to create a longer runway for CEB so that we can continue providing affordable and accessible air transport services for everyJuan,” said Lance Gokongwei, president and CEO of CEB and JGSHI.

CEB said that it is raising this capital as part of its multi-pronged approach to working with capital providers, creditors, suppliers and all other stakeholders, especially its employees, to further strengthen its financial position in the midst of the Covid-19 crisis.

As part of the capital raising exercise, JGSHI will invest its proportionate share of the US$250 million convertible preferred share, which will be offered to existing shareholders for subscription. JGSHI has also further committed to take on any balance of unsubscribed shares in this general offering. (TTG)