Cebu Pacific Air (5J, Manila Ninoy Aquino International) has approved a USD250 million investment in the form of convertible bonds from both the International Finance Corporation (IFC), which is part of the World Bank, and an affiliate of the American private equity firm Indigo Partners, it revealed in a Philippine Stock Exchange filing on April 19.

The airline said its board of directors had approved the investment on April 16. The funds will emanate from the IFC Emerging Asia Fund and from Indigo Philippines LLC, which according to online business data sources was registered as a limited liability company in Wilmington, Delaware on December 1, 2020.

The disclosure did not specify how much of the USD250 million was being provided by the IFC and how much by Indigo Partners. IFC Emerging Asia Fund is a USD693 million private equity fund managed by the IFC Asset Management Company, and the filing described the IFC as the largest global development institution focused exclusively on the private sector in developing countries.

The number of underlying shares for the convertible bonds is 318.75 million common shares priced at PHP38 pesos (USD0.79) each. The closing of the transaction is “subject to post-signing deliverables, which the parties expect to complete over the succeeding weeks,” the filing said.

The bonds are part of a USD500 million capital raising effort Cebu Pacific Air announced in October 2020 to bolster its balance sheet amid the Covid-19 crisis. The company sustained a PHP22.2 billion (USD459 million) net loss for 2020, having carried just five million passengers during the year, down 78% from 2019.

Once completed, Cebu Pacific Air would join the ranks of Indigo Partners-funded low-cost carriers including Frontier Airlines, Volaris, Wizz Air, and JetSMART.

The airline said earlier this month in its annual report that it would resume the planned upgrade of its entire Airbus fleet with newer and more efficient aircraft between 2021 and 2027. Before the onset of the pandemic, the aircraft had been set for delivery until 2026. According to the ch-aviation fleets, it is due to take delivery of sixteen A320-200Ns, twenty-three A321-200NXs, ten A321-200NY(XLR)s, sixteen A330-900Ns, and three ATR72-600s.

The current fleet includes twenty-four A320-200s, five A320-200neo, seven A321-200s, seven A321-200NXs, and eight A330-300s, plus six ATR72-500s, two ATR72-500(F)s, and thirteen ATR72-600s operated by regional unit Cebgo (DG, Manila Ninoy Aquino International). Of this total, 25 aircraft are leased from 11 lessors while the rest are owned.