Cebu Air sets final price of stock rights at P38

MANILA, Philippines — Cebu Air Inc., the operator of budget carrier Cebu Pacific, has priced its convertible preferred shares rights offering at P38 a share.

In a stock exchange filing, Cebu Air said it would offer more than 328.947 million shares to raise P12.5 billion.

The company said dividend yield rate is at six percent per annum.

The indicative timeline for the listing date is on March 29, while offer period will run from March 3 to 9.

“The above revised indicative timetable is subject to change depending on, among others, relevant regulatory approvals and market conditions,” Cebu Air said.

The company earlier this month redenominated its planned $250 million stock rights offering to Philippine peso to allow wider participation from all potential eligible shareholders, particularly its retail shareholders.

Cebu Air plans to use the net proceeds from the offer to strengthen its balance sheet by providing liquidity to address its financial liabilities.

Some P4.81 billion will be spent for repayment of an advance by JG Summit Philippines Ltd., while P3.91 billion is intended to be used for aircraft operating lease payments due this year.

Another P3.33 billion will be allocated for principal debt repayments due this year, and P384 million for general corporate purposes, which are primarily for passenger refunds in case cash inflows from operations become insufficient as a consequence of the COVID-19 pandemic’s impact to health and travel-related concerns.

Given the mounting losses due to the pandemic, Cebu Air last year announced plans to raise up to $500 million in fresh capital which will involve the issuance of up to $250 million in new convertible preferred shares, as well as another $250 million in privately placed convertible bonds.