CEBU AIR, Inc., the listed operator of budget carrier Cebu Pacific, announced Wednesday the final terms of its stock rights offer to raise almost P12.5 billion, partly aimed at addressing the impact of the pandemic crisis on its operations.

In a statement, the company said it intends to raise P12,499,999,984 from the issuance of peso-denominated convertible preferred shares.

As for the entitlement rights, it will offer 328,947,368 of cumulative, non-voting, non-participating convertible preferred shares with a price of P38 per share.

The dividend yield per annum was set at 6%.

The company set the conversion price at P38 per share.

The offer period will start on March 3 and end on March 9.

Cebu Air set March 29 as the tentative listing date.

The company intends to use the net proceeds from the offer to strengthen its balance sheet “by providing liquidity to address its financial liabilities, including P4.805-billion allocation for repayment of an advance by JG Summit Philippines Ltd.; P3.913-billion budget for aircraft operating lease payments due in 2021; P3.328 billion for principal debt repayments, which is also due this year; and P0.384-billion allocation 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 on health and travel-related concerns.”

Cebu Air suffered a net loss of P14.69 billion for the first nine months of 2020 from the P6.77-billion profit it generated in the same period in 2019.

Cebu Air shares closed 1.18% lower at P50.10 apiece on Wednesday. — Arjay L. Balinbin