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Cebu Air Inc., the operator of budget airline Cebu Pacific, said Thursday it will raise $ 500 million in additional capital to ensure it is well positioned to recover from the impact of COVID-19. The Gokongwei Group’s airline unit said it notified the Philippine Stock Exchange of its plan to issue $ 250 million in new convertible preferred shares and another $ 250 million in privately placed convertible bonds. He said the transactions would be addressed at a special shareholders meeting on November 20, 2020. The new convertible preferred shares will be available to all shareholders, including JG Summit, giving all investors the opportunity to participate while the private convertible will Bonds will be available to a limited number of reputable international investors. “We need to create a longer runway for CEB so that we can continue to provide affordable and accessible air transportation services for all Juan,” said Cebu Pacific President and CEO Lance Gokongwei. The airline is raising 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. He said that since the onset of the pandemic, he had worked to accelerate its transformation to an even more digitized airline, resulting in a significantly reduced unit cost, allowing the airline to continue to offer affordable air travel. The capital-raising exercise will provide the airline with the necessary track to withstand the financial challenges it faces as it slowly returns to pre-COVID business levels and settles into the “new normal.” Gokongwei said that Cebu Pacific is an important part of JG Summit Holdings Inc.’s investment portfolio. “We strongly believe in the airline’s vital mission of providing critical and profitable air travel within and outside our country, and its crucial role as an engine of economic growth, “he said. He said the capital raising exercise represents strong support and commitment from JG Summit to provide financial support to the CEB. JG Summit, the parent and 67 percent owner of CEB, will invest its proportionate share of the $ 250 million convertible preferred stock, which will be offered to existing shareholders for subscription. JG Summit said it would assume any balance of unsubscribed shares in the general offering.
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