Cebu Air Inc., the operator of Cebu Pacific and Cebgo, plans to raise P16 billion in additional capital in the first quarter, an executive said Thursday.
Trina Asuncion, Cebu Pacific director for corporate finance and investor relations, said in a virtual briefing the airline company was looking to raise additional capital of P12.5 billion to P16 billion via syndicated loans from commercial banks.
Asuncion said “hopefully,” the fresh fund-raising activity would materialize within the quarter.
“We are quite confident that it will go positive. It’s not final yet, but we are seeing support with various banks on a general sense,” she said.
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.
The company also intends to use the proceeds to repay debts due 2021 amounting to P3.328 billion and P384 million for general corporate purposes, which are 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.
Cebu Pacific vice president for marketing and customer experience Candice Iyog said the airline was now operating at 23 percent of pre-COVID network, with 32 Philippine destinations.
“So ,there is progress. We are now flying to six destinations for leisure travel and have restored 89 percent of pre-COVID domestic destinations,” she said.
Iyog, however, said the industry’s recovery would not likely happen this year.
“Definitely, we won’t see the recovery to pre-COVID level in 2021. That’s given. But, we do want to be agile enough to scale up operations, should the lifting of the restrictions which was announced last Friday happen,” she said.
The Inter-Agency Task Force for the Management of Emerging Infectious Diseases earlier approved uniform travel protocols across all local government units , easing quarantine and documentary requirements.
“We want to pivot quickly and address the demand. Right now, I think the earliest possible will be 2022, but again we don’t know for sure yet,” Iyog said.
“What we can see is we are seeing more people searching for flights. That’s the good thing,” she said.
Cebu Pacific carried 3.14 million domestic passengers last year, down from 13.03 million domestic passengers it served in 2019.
The airline also flew 906,665 international passengers in 2020, lower than 5.95 million international passengers in 2019.