CEBU AIR, Inc., the listed operator of budget carrier Cebu Pacific, said on Monday it might start its $250-million convertible preferred shares stock rights offering on Feb. 26 as part of its fundraising plan.
In a disclosure to the stock exchange, the airline operator said it intends to use the proceeds to strengthen its balance sheet by providing liquidity to address its financial liabilities, including $100-million allocation for repayment of an advance by JG Summit Philippines Ltd.; $71.3-million budget for aircraft operating lease payments due this year; and $72.3-million budget for principal debt repayments, which are also due this year.
The net proceeds will also cover the $6.4-million budget for general corporate purposes, which are basically for ticket refunds “in case cash inflows from operations become insufficient” due to the pandemic, Cebu Air added.
The offer period is until March 4.
The company said its plans may still change, as they are dependent on the changing market conditions or new information regarding the cost or feasibility.
“The corporation’s cost estimates may also change as actual costs may be different from the budgeted costs,” it added.
Also on Monday, the low-cost carrier announced its latest offering to “boost passenger confidence.”
Cebu Pacific said it offers “COVID Protect,” an upgrade to the airline’s insurance plan, for P270.
“This upgrade, which will cover COVID-related hospitalization and treatments, is timely as the carrier aims to provide more passenger options,” the budget carrier said in an e-mailed statement.
With this insurance add-on, Cebu Pacific travelers who test positive for COVID-19 will get up to P1 million coverage for hospitalization and medical expenses, it added.
It said the insurance coverage starts on the departure date from origin and ends two hours upon arrival back at origin, with a maximum travel duration of 30 consecutive days. — Arjay L. Balinbin