Cebu Air signs P16-billion landmark syndicated loan facility with six major domestic banks

Cebu Air Inc., the operator of Cebu Pacific and Cebgo, on Friday signed a P16-billion ten-year term loan facility with a syndicate of domestic banks.

The airline unit of the Gokongwei Group said the term loan facility, which was equally participated in by government financial institutions and leading private sector domestic banks, represented the confidence of these institutions in the recovery of the Philippine economy and the belief that Cebu Pacific would continue to play a leading and vital role in this economic recovery.

State-run Development Bank of the Philippines and Land Bank of the Philippines joined hands with Asia United Bank Corp., Bank of the Philippine Islands, Metropolitan Bank & Trust Company and Union Bank of the Philippines as lenders in the facility.

“We at JG Summit and Cebu Pacific are grateful for the confidence of the Philippine banking community, given the participation by both the government owned financial institutions and the private sector commercial banks in this landmark syndicated loan facility,” said Cebu Pacific president and chief executive Lance Gokongwei.

“Cebu Pacific remains focused on its business transformation to reduce its unit cost so as to continue to offer affordable flights and remain as our country’s airline for every Juan,” he said.

The airline will use the proceeds fund capital expenditures and other general corporate purposes.

The loan will also provide a cushion against unexpected working capital requirements that may stem from fuel price and foreign exchange rate volatility.

BPI Capital Corp. acted as the lead arranger and bookrunner for the transaction. DBP, LBP and AUB were lead arrangers, while MBTC and UBP acted as arrangers for the syndicated loan. AUB-Trust and Investments Group was appointed as the facility agent.

Cebu Pacific started its P12.5-billion stock rights offering on March 3 which would last until March 9.

The airline plans to use the proceeds from the SRO to repay an advance from JG Summit Philippines Ltd. amounting to P4.805 billion and P3.91 billion for aircraft operating lease payments due 2021.

Topics: Cebu Air Inc. , Cebu Pacific , Development Bank of the Philippines , Land Bank of the Philippines
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementGMA-Working Pillars of the House