Cebu Air revives IPO plan, eyes bigger proceeds


Posted at Aug 25 2010 05:17 PM | Updated as of Aug 26 2010 01:17 AM

MANILA, Philippines - Cebu Air Inc. is reviving its bid to conduct an initial public offering (IPO) and this time, is projecting bigger proceeds at P32.19 billion, 26% more than its original target of just about P25.7 billion.

In a filing with the Securities and Exchange Commission (SEC), Cebu Air which operates budget airline Cebu Pacific, said it will list 214.632 million primary and secondary shares at an offer price of up to P150 per share, much higher than the initial target of P95 a piece.

Cebu Air has tapped Citigroup Global Markets Limited, Deutsche Bank AG (Hong Kong Branch) and J.P.
Morgan Securities Ltd. as global coordinators and international lead managers, while ATR-Kim Eng Capital Partners Inc. was hired as domestic lead underwriter.

In its revised IPO proposal, Cebu Air will sell 186.637 million primary and secondary shares that will
generate as much as P27.99 billion in proceeds, while another 27.995 million shares worth P4.19 billion
is being set aside to cover overallotments.

Cebu Air is pursuing the IPO amid the labor problems besetting rival Philippine Airlines.

Cebu Air's IPO was originally scheduled for April but was put at bay due to uncertain market conditions  as well as the Philippine national elections.

At that time Cebu Air's application,  already approved by the SEC and the Philippine Stock Exchange, involved the listing of up to 125.25 million primary shares and up to 110.31 million secondary shares at a
target price at P95 per share. Another 35.3 million common shares were also set aside to cover

In the original filing, Cebu Air said it will use Proceeds from the public offering for pre-delivery aircraft payments.

Last May, Cebu Air increased its Airbus A320 orders by 7, doubling its seat capacity in 5 years with a total of 51 aircraft by 2014.

The 22 total Airbus A320 orders, including the additional 7 will require an investment of some $1.4 billion.

These new aircraft will be enable the airline to increase flight frequencies in existing routes as well as to expand to new domestic and international routes, including northern part of China, Korea
and Japan.