Cebu Pacific in talks with banks to raise up to P16B

The Gokongwei family’s Cebu Air Inc. is in talks with private and government banks to raise P12.5 billion to P16 billion to support budget carrier Cebu Pacific through the COVID-19 pandemic.

Trina Asuncion, Cebu Air director for financial analytics and investor relations, said they were in ongoing discussions with lenders, including state-run Land Bank of the Philippines and Development Bank of the Philippines, and a deal could be potentially sealed within the month.

“It’s not final yet, but we are quite confident it will go positive,” Asuncion said in a press briefing. She said lenders were supportive and that Cebu Air could absorb additional debt given its strong balance sheet.

The money from the banks will be on top of Cebu Air’s ongoing P12.5- billion share sale involving convertible preferred shares to existing stockholders.

Asuncion said the funds would help the airline weather the crisis as it was anticipating a U-shaped or protracted recovery.

Cebu Pacific, which is operating roughly half of its fleet of 73 planes, will continue accepting newer and more fuel-efficient aircraft that were previously ordered to replace older models, she said.