Cebu Pacific to use IPO funds to buy 20 planes

E. N. J. David and N. J. C. Morales

BusinessWorld 

GOKONGWEI-LED Cebu Air, Inc. will use the bulk of funds to be raised from a planned initial public offering (IPO) to buy up to 20 more aircraft within five years, an executive of the budget airline’s parent said yesterday.

Cebu Air, which operates as Cebu Pacific, has yet to set the date for the IPO, which will raise P12 billion, but had secured clearance from regulators.

“It’s going to be for capital expenditures for purchasing airplanes. We have a purchase order from Airbus for 15 Airbus A320 in the period of 2010-2015 and an option to buy five more,” said Bach Johann M. Sebastian, senior vice-president for corporate planning of listed JG Summit Holdings Philippines, Inc.

Documents showed the carrier needed to make P9 billion in advanced payments to increase its fleet to 49 by 2014.

Mr. Sebastian however said going public was only one option, and that funds could also be raised through loans from export credit agencies.

Cebu Pacific can also tap the lease market, he said.

The airline is planning to list 125.3 million new common shares with a par value of P1.00 each, which would be offered to the public at a maximum price of P95.00 apiece. A total of 110.3 million secondary shares will be listed at the same price. Read more...