CEBU AIR TO RAISE FUNDS
Cebu Pacific Air is raising $500 million to fund its planned transformation after its airline business was ravaged by the COVID-19 pandemic.
The fund raising exercise involves a convertible preferred shares (the “Convertible Preferred Shares”) rights issue for an aggregate proceeds of about USD250.0 million (or its equivalent in Philippine Peso) (the “Convertible Preferred Shares Rights Issue”); and a private placement of convertible bonds (the “Private Placement”) with aggregate subscription price of up to USD250.0 million (the “Convertible Bonds”).
In line with the foregoing, the Board of Directors of the Corporation is seeking shareholders’ approval to amend the Amended Articles of Incorporation to increase the Corporation’s authorized capital stock from PHP1,340,000,000.00 to PHP1,740,000,000.00 and create a new class of convertible preferred shares with a par value of PHP1.00 per share.
In the first six months of 2020, the Cebu Air recorded revenues amounting to PHP17.3 billion, a 61.2% decline from the PHP44.7 billion revenues generated in the same period last year.
The lockdowns imposed in various parts of the country led to cancellation of flights across the Corporation’s entire network. From March 15 to June 30, 2020 alone, around 44,000 flights were cancelled and 2.1 million passengers were affected.