Cebu Pacific Secures $ 329 Million Loan From Local Union | New
Philippine low-cost airline Cebu Pacific (CEB) today secured a 10-year loan of 16 billion pesos ($ 329 million) from a syndicate of private and government banks.
The loan proceeds will be used to finance “capital expenditures and other general business purposes” and “will provide protection against unforeseen working capital requirements that may arise from volatile fuel prices and interest rates. exchange rate, ”the airline said in a statement the same day.
The lenders are the Development Bank of the Philippines (DBP), the Land Bank of the Philippines (LBP), Asia United Bank Corporation (AUB), the Bank of the Philippine Islands (BPI), the Metropolitan Bank and Trust Company (MBTC) and the Union Bank of the Philippines (UBP).
BPI Capital Corporation was the bookrunner of the transaction, as well as one of the three principal arrangers appointed, along with DBP and LBP. AUB was a principal arranger, while MBTC and UBP acted as arranger. AUB-Trust and Investment Group has been appointed as the Facilities Agent.
The move follows Cebu Pacific’s £ 12.5 billion rights offer for the convertible preferred shares, which began on March 3.
The main shareholder CPAir Holdings has expressed its full support for this rights offer by committing to subscribe its share on a pro rata basis and the remaining unsubscribed rights. JG Summit is the parent company of CPAir Holdings and Cebu Pacific.
The syndicated loan as well as the rights issue “will further strengthen the CEB’s balance sheet and liquidity position and is a prime example of how the government, the private sector and the sponsor can work together to contribute to the rebirth of the CEB. Philippines, ”says Cebu Pacific.
President and CEO Lance Gokongwei calls it a “historic syndicated credit facility” and further states that the airline “remains focused on its business transformation to reduce its unit cost in order to continue to offer affordable flights.” .
The airline said that before the pandemic, the airline concluded 2019 with a “conservative net debt to equity ratio of 1.26x.” Despite “a sharp drop in income and losses due to the Covid-19 pandemic,” its net debt to equity ratio stood at 2.34x as of September 30.
He adds: “The strong balance sheet and liquidity with which the company entered in 2020 has supported it in this difficult environment.”