Cebu Pacific finalises $260m local-currency rights issue

Cebu Pacific has finalised details of its planned Ps12.5b ($258m) 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. It plans to offer 329m 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% 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.<br/>