Cebu Pacific Air (5J, Manila Ninoy Aquino International) has listed 328,947,368 convertible preferred shares with a par value of PHP1.00 peso (USD0.02) per share for trading on the main board of the Philippine Stock Exchange (PSE), the company said in a stock exchange filing. BPI Capital Corporation acted as the sole global arranger, book-runner, and underwriter for the offer which should raise USD6.578 million if successful.
This followed the successful completion of its convertible preferred shares stock rights offering which ran from February 26 to March 4, 2021, during which it raised PHP12.49 billion (USD256 million) from existing shareholders.
“The funds raised from the offer will go towards strengthening the balance sheet of the company and ensuring it has sufficient runway to thrive in the new normal,” commented president and chief executive officer Lance Gokongwei.
“Cebu Pacific was in a unique situation among its airline peers in that it entered into the COVID-19 pandemic with a historically strong ability to generate free cash flow. It achieved a strong liquidity position as of December 31, 2019, having ended 2019 with a conservative net debt-to-equity ratio of 1.26x. While it sustained severe revenue decline and losses due to the COVID-19 pandemic, its net debt-to-equity ratio was still at a strong 2.34x as of September 30, 2020. The strong balance sheet and liquidity, with which the company entered 2020, has supported it in this challenging environment,” he said.
As previously reported, the airline has also secured a PHP16 billion (USD206 million) 10-year loan from a syndicate of domestic banks to fund its capital expenditures and for other general corporate purposes. The loan would also provide a cushion against unexpected working capital requirements that may arise from fuel price and foreign exchange rate volatility, the company said.
