PHILIPPINE NEWS SERVICE — The Securities and Exchange Commission yesterday approved the P15-billion initial public offering of low-cost carrier Cebu Air Inc., the airline unit of conglomerate JG Summit Holdings Inc.
Cebu Air will sell new and secondary shares of up to 72 million and 63.4 million, respectively, at a maximum offer price of P95 per share, according to documents filed with the commission.
The company also allocated another 20.3 million shares to cover over-allotment.
The company will offer 94.8 million shares to foreign investors and the rest to local clients.
The company has proposed to list on the first board of the Philippine Stock Exchange by the first quarter of 2008.
Cebu Air expects to raise P6.6 billion from the sale of primary shares. It plans to use the proceeds to finance the acquisition of new aircraft and spare engines, as well as for working capital and other general corporate purposes.
The airline has appointed UBS Investment Bank as sole international underwriter and book runner and ING Bank and First Metro Investments Corp. as domestic underwriters.
Cebu Air’s fleet currently comprises 15 aircraft, which includes 10 Airbus A319-111, and five A320-214 aircraft.
The airline plans to increase its fleet size in the coming years. It has entered into operating lease agreement for five new Airbus 320-214, which will be delivered in late 2007 and mid-2008.
The company also plans to acquire up to 20 new A320-200 aircraft beginning 2010 and four new ATR 72-500 turboprop aircraft, six of which will be delivered from early 2008 to early 2009. It said the turboprop aircraft would help the company operate effectively in smaller airports in the country.
Cebu Pacific is the leading domestic airline in the country in terms of total passengers carried. Its passenger volume reached 4.01 million in the first nine months from 2.3 million a year ago.
Route network has also grown from eight routes in 1997 to 40 routes as of end September. It recently added Taipei, Shanghai, Xiamen, Macau and Guangzhou to its growing international route.
The airline plans to add routes in Ho Chi Minh, Hanoi, and Bandar Seri Bagawan next year.
Cebu Air will be the fifth Gokongwei-owned company to be listed in the stock exchange. The others are JG Summit Holdings Inc., which is the holding company of the Gokongweis, Robinsons Land Corp., Universal Robina Corp. and Digital Telecommunications Inc.