Cebu Air raises $250 million through convertible bonds

CEBU AIR, Inc., the listed operator of budget carrier Cebu Pacific, announced on Monday that it had signed an agreement to receive $250-million investment in the form of convertible bonds with International Finance Corp., IFC Emerging Asia Fund, and Indigo Philippines LLC.

The agreement was signed on April 16 after the company’s board of directors’ approval, Cebu Air said in a disclosure to the stock exchange.

“Transaction closing is subject to post-signing deliverables, which the parties expect to complete over the succeeding weeks,” it added.

It said the number of underlying shares for the convertible bonds is 318.75 million common shares with P38 conversion price.

The International Finance Corp. is a member of the World Bank Group. It is the world’s largest development institution focusing solely on the private sector in developing countries, according to Cebu Air.

Meanwhile, the IFC Emerging Asia Fund is a $693-million private equity fund managed by the IFC Asset Management Company, a division of the International Finance Corp (IFC).

Indigo Partners LLC, a private equity firm headquartered in the United States, is focused on aviation investments.

Currently, Indigo Partners’ aviation investments include Frontier Airlines in the United States, Volaris in Mexico, Wizz Air in Europe and JetSMART in Chile. In March, Cebu Air successfully raised almost P12.5 billion from its stock rights offering, which would be used to strengthen its balance sheet.

In the same month, its board approved a P16-billion, 10-year loan from local banks, which would be used to fund its capital expenditures and other general corporate purposes.

Cebu Air shares closed 3.59% lower at P48.30 apiece on Monday.