The Philippines’ low-cost airline Cebu Pacific plans to raise up to $500 million additional capital to bolster its balance sheet and spur recovery from the effects of the Covid-19 pandemic, media reports said.
President and CEO of Cebu Pacific, told the media, “We need to create a longer runway for CEB so that we can continue providing affordable and accessible air transport services for everyone. 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 strengthen its financial position in the midst of the pandemic. We strongly believe in the airline’s vital mission of providing fundamental and value-for-money air travel in and out our country, and its crucial role as a driver for economic growth.”
Cebu Pacific will further move ahead with the development after receiving approvals from the Philippine Stock Exchange (PSE). The company has floated for the issuance of new convertible preferred shares worth $250 million, while the remaining $250 million in privately placed convertible bonds.
It is reported that the approvals for the issuance of the funds will be discussed at a special shareholder meeting in November. All stockholders of the company will have the option to buy the new convertible preferred shares. However, only a few selected international investors will have the option to acquire the privately placed convertible bonds.
The airlines industry has been walloped by the pandemic. However, some international flights have resumed temporary operations.