Cebu Air stock rights offer starts

CEBU AIR, Inc. (CEB), the listed operator of budget carrier Cebu Pacific, announced on Wednesday the start of its stock rights offer period.

The company intends to raise around P12.5 billion, partly aimed at addressing the impact of the ongoing global health crisis on its business.

In a disclosure to the stock exchange, the listed airline operator said a total of 328.95 million of “cumulative, nonvoting, non-participating convertible preferred shares” will be offered from March 3 to March 9.

The company set the offer price at P38 per share. It set the dividend yield per annum at 6%.

“One entitlement right for every 1.8250 CEB common shares held as of record date,” it noted.

March 29 has been set as the tentative listing date.

Cebu Air said net proceeds from the offer should strengthen its balance sheet by providing liquidity to address its financial liabilities, including 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 4.09% lower at P43.40 apiece on Wednesday.