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Cebu Air issues $250-million worth of convertible bonds to IFC and Indigo

Cebu Air Inc., the operator of Cebu Pacific and Cebgo, said Monday it raised $250 million from a private offering of convertible bonds to fund its operations amid the global pandemic.

The airline unit of the Gokongwei group said it signed an agreement with International Finance Corp., the IFC Emerging Asia Fund and Indigo Philippines LLC, an affiliate of Indigo Partners LLC, for the private placement of $250 million in convertible bonds.

The transaction was approved by Cebu Pacific’s board of directors at a special meeting on April 16. The number of underlying shares for the convertible bonds is 318,750,000 common shares with P38 conversion price.

“Transaction closing is subject to post-signing deliverables, which the parties expect to complete over the succeeding weeks,” CEB said.

Cebu Pacific earlier raised $250-million convertible preferred shares and P16 billion loans from local banks.

The airline is raising the capital as part of its multi-pronged approach to working with capital providers, creditors, suppliers and other stakeholders, especially its employees, to further strengthen its financial position amid the crisis.

The capital raising exercise will provide the airline with the needed runway to withstand the financial challenges it faces as it slowly goes back to pre-COVID business levels and settles into the “new normal.”

Cebu Pacific reported a net loss of P22.2 billion in 2020, a reversal of the P9.12-billion net income in 2019.

Revenues amounted to P22.6 billion in 2020, or 73 percent lower than in 2019. The airline carried 5 million passengers last year, down by 78 percent compared to 2019.

Topics: Cebu Air Inc. , Cebu Pacific , Cebgo , convertible bonds , global pandemic
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