Philippines' Cebu Air to raise US$500m to weather pandemic

Cebu Air, operator of budget carrier Cebu Pacific, said it would issue US$250 million worth of convertible preferred shares.
Cebu Air, operator of budget carrier Cebu Pacific, said it would issue US$250 million worth of convertible preferred shares.PHOTO: CEBU PACIFIC AIR/FACEBOOK

MANILA (REUTERS) - Philippine budget carrier Cebu Air plans to raise roughly $500 million (S$679.5 million) through bonds and shares to ride out the downturn in the aviation sector caused by the coronavirus pandemic, the airline said on Thursday (Oct 8).

Hit by unprecedented travel curbs, the global airline sector has resorted to job cuts and cost-saving measures to survive.

Cebu Air, operator of budget carrier Cebu Pacific, said it would issue US$250 million worth of convertible preferred shares and raise another US$250 million through a private offering of convertible bonds.

"Travel restrictions imposed by various governments, both local and abroad, have led to abrupt reduction in passenger traffic for the corporation and cast uncertainty over the near term prospects," Cebu Air told the stock exchange.

The Philippines' largest budget carrier, which operates a fleet of 76 aircraft, most of them Airbus, cut a quarter of its workforce of about 4,000 in August. It now operates only about 15 per cent of its pre-pandemic operations.

Philippine carriers suspended all services in mid-March after a stringent lockdown imposed by President Rodrigo Duterte to rein in the virus. They later sought credit lines and fee waivers.