Cebu Pacific sets final terms of P12.5-B stock rights offer

Cebu Air Inc., the operator of budget carrier Cebu Pacific, has announced that it has set the final terms of its stock rights offer in a bid to raise P12.5 billion from the issuance of peso-denominated convertible preferred shares.

In a disclosure to the Philippine Stock Exchange, Cebu Air said the proceeds of the offer will be used to finance its debt obligations, including:

• P4.805 billion allocation for repayment of an advance by JG Summit Philippines Ltd.
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• P3.913 billion allocation for aircraft operating lease payments due in 2021
• P3.328 billion for principal debt payments due in 2021

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• P384 million for general corporate purposes, primarily for passenger refunds in case cash flow from operations become insufficient due to COVID-19’s impact to air travel

Cebu Air will offer 328,947,368 of cumulative, non-voting, non-participating convertible preferred shares as “entitlement rights” at an offer price of P38 per entitlement right.

The rights carry a 6% dividend yield per annum. The offer period will begin on March 3, 20211 and end on March 9, 2021.

Also it said that the offer is open to shareholders of record as of February 26, 2021.

Cebu Air has appointed BPI Capital Corp. as sole global coordinator, bookrunner, and underwriter of the offer. —LBG, GMA News