Cebu Pacific eyes up to P16-B loan from banks
By Arjay L. Balinbin, Senior Reporter
CEBU PACIFIC, operated by Cebu Air, Inc., is in discussions with various banks for up to P16 billion in financing amid a public health crisis that has battered commercial airlines, a company official said.
“So overall, on the debt side, we are raising anywhere from another P12.5 billion to maybe P16 billion, but it’s not final yet. We are quite confident that it will go positive. These are through various banks,” Trina E. Asuncion, Cebu Pacific director for financial analytics and investor relations, said at an online briefing on Wednesday.
Ms. Asuncion noted this fundraising is in addition to the company’s convertible preferred shares offering, where it intends to raise around P12.5 billion.
“Part of our fund-raising plan is… debt capital raising via syndicated loans through various commercial banks,” she said. “Our net debt-to-equity ratio is quite low. We have one of the stronger balance sheets, so we’ve seen the support of all banks and these banks include Land Bank of the Philippines and Development Bank of the Philippines.”
Cebu Pacific is hoping to close deals with such banks “within the quarter,” Ms. Asuncion also noted.
The budget carrier is currently operating about 23% of its pre-pandemic network with 32 domestic destinations, according to Candice A. Iyog, Cebu Pacific vice-president for marketing and customer service.
The company operates only half of its 73 aircraft, as some of them have been sent to Australia for “indefinite storage” amid a global health crisis.
The low-cost airline anticipates to receive a few more planes this year.
“It’s not a significant increase because there are old aircraft exiting, so for replacement,” Ms. Asuncion said.
Ms. Iyog said there are no plans for further job cuts this year. “We’ve already done our workforce reductions last year — 30% of the workforce — so that’s around 1,300 of our total workforce last year,” she said.
“We’re being very agile. We are adjusting with the market, and that’s why we keep pushing for the relaxation of travel restrictions and that’s why we are doing everything we can to stimulate travel,” Ms. Iyog added.
Cebu Air shares closed 2.65% higher at P44.55 apiece on Thursday.