LOW-COST carrier Cebu Pacific (CEB) seeks to raise up to US$500 million additional capital to strengthen its balance sheet and ensure that it is well-positioned to recover from the impact of Covid-19.
CEB gave notice to the local bourse that it will be seeking approval for the issuance of up to $250 million in new convertible preferred shares, as well as another $250 million in privately placed convertible bonds. It is envisioned that the approvals for the issuance of the preferred shares, as well as the convertible bond, will be taken up in a special shareholders meeting to take place on Nov. 20, 2020.
The new convertible preferred shares will be made available to all stockholders, including JG Summit, giving opportunity for all investors to participate; while the privately placed convertible bonds, will be made available to a limited number of reputable international investors.
“We need to create a longer runway for CEB so that we can continue providing affordable and accessible air transport services for everyjuan,” said Lance Gokongwei, president and chief executive officer of Cebu Pacific and JG Summit Holdings Inc.
CEB is raising this capital as part of its multi-pronged approach to working with capital providers, creditors, suppliers and all other stakeholders, especially its employees, to further strengthen its financial position in the midst of this Covid-19 crisis.
This capital raising exercise represents strong support and commitment on the part of JG Summit Holdings Inc. (JGSHI) to provide financial support to CEB. JGSHI, parent and 67 percent owner of CEB, will invest its proportionate share of the $250 million convertible preferred share, which will be offered to existing shareholders for subscription. JGSHI further commits to take on any balance of unsubscribed shares in this general offering.(PR)