Tourism

Cebu Air gets shareholders’ consent for fundraising plan

Cebu Air secured shareholders’ approval to raise its capitalization to P1.34 billion to facilitate the issuance of preferred shares as part of its business transformation fundraising plan.

Cebu Air secured shareholders’ approval to raise its capitalization to P1.34 billion to facilitate the issuance of preferred shares as part of its business transformation fundraising plan.

The low-cost carrier owned by the Gokongwei family aims to raise $500 million in additional capital to bolster its balance sheet and stay afloat amid the tough business environemtn.

It will issue $250 million in new convertible preferred shares and another $250 million worth of convertible bonds.

The issue price will be decided based on various factors, including the prevailing market price at such relevant time, and the broader equity capital market conditions, and the conversion price or strike price, as the case may be, of the convertible preferred shares and the convertible bonds and warrants is expected to be the same and to be set within the P38 to P45 range, representing 2 to 21% conversion premium over Cebu Air’s 30-day volume weighted average price from Aug. 26 to Oct. 7.

The transformation plan involves right-sizing of network and fleet to meet new demand, and improvement of operations efficiency through process and policy enhancements and digitalization.

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