Cebu Pacific has finalised details of its planned Ps12.5 billion (US$258 million) rights offering, aimed at providing the Philippine low-cost carrier with funds to repay debts – including those owed to lessors – and ensuring it has sufficient funds to refund passengers, according to a report from Cirium, a date and analytics company, and filings with the Philippine Stock Exchange.
It plans to offer 329 million convertible preferred shares with a par value of Ps1 per share and priced at Ps38 per share, according to a 16 February filing with the Philippine Stock Exchange. The dividend yield is 6 percent per year, although as with common shareholders, companies can also suspend dividend payments to holders of preference shares. Cebu’s shareholders are entitled to one convertible share for every 1.83 common shares held as of 26 February.
The offer period opens on 3 March and closes on 9 March. Within its span, the airline’s shareholders can exercise their rights to purchase the convertible preferred shares, ignore those rights, or sell their rights. The tentative issue date is 29 March. Cebu says it will use the proceeds to strengthen its balance sheet by providing liquidity to address financial liabilities.