Cebu Air eyes P16B in new loans

With air travel recovery still far off, Cebu Air Inc. is tapping new funds to make it through the coronavirus pandemic.

In a virtual briefing, Cebu Pacific director for corporate finance and investor relations Trina Asuncion said the budget carrier is looking to raise between P12.5 billion and P16 billion within the quarter via syndicated loans with various banks.

Cebu Pacific kicked off P12.5 billion stock rights offering which would run until March 9.

Proceeds from the share issuance will be used to repay an advance from JG Summit Philippines Ltd. amounting to P4.805 billion, and P3.91 billion for aircraft operating lease payments due in 2021.
The company also intends to use the proceeds to repay debts due in 2021 amounting to P3.328 billion and P384 million for general corporate purposes, which are primarily for passenger refunds in case cash inflows from operations become insufficient as a consequence of the pandemic’s impact to health and travel related concerns.

Candice Iyog, VP for Marketing and Customer Experience of Cebu Pacific, said the airline is now operating 23 percent of its pre-COVID network.

“So ,there’s progress. We are now flying to six destinations for leisure travel and have restored 89 percent of pre-COVID domestic destinations. Definitely, we wont see the recovery to pre-COVID level in 2021 that’s a given. But we do want to be agile enough to scale up operations with the lifting of restrictions,” she said.

Cebu Pacific flew a total of 3.14 million domestic passengers last year, a sharp drop from 13.03 million in 2019.

In terms of international passengers, the airline transported 906,665 passengers, a big decline from 5.95 million.

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