Cebu Pacific lists convertible preferred shares

MANILA, Philippines — Budget carrier Cebu Pacific has listed its convertible preferred shares on the main board of the Philippine Stock Exchange following the successful completion of its stock rights offering.

Cebu Pacific raised P12.49 billion from existing shareholders from the issuance of convertible preferred shares.

“The success of this activity is a testament to Cebu Pacific’s fortitude and its steadfast commitment as the Philippine national flag carrier, which reminded me of something that my father once said, success is not necessarily about connections or cutting corners, or chamba. Success can be achieved through hard work, frugality, integrity, responsiveness to change, and most of all, boldness to dream,” Cebu Pacific president and CEO Lance Gokongwei said in a statement yesterday.

Proceeds from the offer will be utilized to strengthen the balance sheet of the carrier and ensure it has sufficient runway to thrive in the new normal.

Cebu Pacific said it was in a unique situation among its airline peers given its strong ability to generate free cash flow.

Despite sustaining severe revenue decline and losses due to the pandemic, the company’s net debt-to-equity ratio was still at a strong 2.34x as of end September last year.

Cebu Pacific early this month also signed a P16 billion 10-year term loan facility with a syndicate of domestic banks.

Proceeds of the loan will be used to fund its capital expenditures and other general corporate purposes.

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