CEBU AIRPORT OPERATOR INKS NEW DEBT DEAL

The operator of Mactan-Cebu international airport has inked a deal with its lenders that will result in freeing about P3.6 billion in cash from this year to 2023 that it could use to support its operations that were hard hit by the COVID-19 pandemic.

Under the renewed loan agreement forged by both Megawide and its creditor-banks, principal payments will be deferred to 2027-2029 when the travel industry is expected to have fully recuperated from the ill effects of COVID-19.

GMR-Megawide Cebu Airport Corp. (GMCAC), the private operator of the Mactan-Cebu International Airport (MCIA), has signed a deal with its lenders to relax agreements on its PHP23.9-billion debt used to develop, operate and maintain the country’s second-biggest airport, its parent firm, Megawide Construction Corp., announced recently.

Lenders BDO Unibank, Philippine National Bank, Bank of the Philippine Islands, Development Bank of the Philippines, Land Bank of the Philippines, Metropolitan Bank and Trust Co., and the Asian Development Bank have agreed to give GMCAC, some financial relief amid the tough aviation business environment. GMCAC is the airport subsidiary of publicly listed Megawide.

“We are glad that the negotiations with our lenders were finalized and we express our sincerest gratitude to our financial partners, who from the very start of this pandemic have been very supportive. The agreement is a strong sign of support and confidence in Megawide’s airport business model. The more relaxed debt servicing schedule will provide our airport operations a clearer runway to full recovery once the situation normalizes,” Megawide chairman and chief executive officer Edgar Saavedra said in a disclosure to the stock exchange on Friday.

As the pandemic wreaked havoc on the travel industry, GMCAC formally solicited for a 30-day grace period for its six-month debt servicing from December 15, 2019, falling due on June 15, 2020, as provided under the Bayanihan Act. The lenders unanimously approved the request on June 11, 2020.

With travel continuing to be restricted, GMCAC requested for a further extension of settlement to September 2020, which GMCAC duly paid on September 15, 2020, including additional interest on the principal and interest accruing from June 15 to September 15, 2020.

On December 11, 2020, GMCAC sent notifications to its lenders to defer its principal and interest payments falling on December 15, 2020 to February 15, 2021 due to the economic havoc wrought by the coronavirus pandemic.

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