MANILA - Gokongwei-led airlines Cebu Pacific is aiming to raise up to $250 million -- around P12 billion -- from a stock rights offer to refinance its maturing debt obligations and provide for passenger refunds for canceled flights amid the pandemic.
The company told the stock exchange that it will offer dollar-denominated convertible preferred shares from Feb. 26 to March 4, which can be sold at around $0.74 to $0.84 per share.
The fundraising is part of Cebu Pacific's "business transformation" plan to adapt to the "abrupt reduction in passenger traffic" brought on by the pandemic.
"Due to this exceptional change in market conditions and industry dynamics, the corporation saw the urgent need to fast track its transformation. It is currently implementing a business transformation exercise that involves right-sizing of network and fleet to meet new demand, and improvement of operations efficiency through process and policy enhancements and digitalization, among others," Cebu Pacific said.
Of the $250-million stock rights offer, the company allotted $6.4 million -- around P300 million -- for its operations, primarily for flight refunds.
The airline has launched initiatives to cushion the impact of the coronavirus pandemic, such as offering unlimited rebooking until March this year, and antigen and RT-PCR tests for passengers to adhere to safety protocols and encourage tourism in the country.