Cebu Air postpones IPO amid global turbulence

Cebu Air, the airline unit of Gokongwei flagship JG Summit Holdings Inc., has indefinitely postponed its initial public offering (IPO) due to turbulence in financial markets overseas.

“Given the extreme volatility in global equity markets, Cebu Pacific, in consultation with JG Summit and UBS, has decided to postpone its IPO until further notice,” said Cebu Air in a disclosure to the Philippine Stock Exchange.

UBS is the sole international underwriter, bookrunner and lead manager of Cebu Air’s IPO while ING Bank and First Metro Investment Corp. are joint domestic lead underwriters.

Cebu Air said current market conditions are not favorable to maximizing shareholder value and it would rather wait until market conditions improve before pursuing a public offering.

“Despite positive feedback regarding the company from international and domestic investors during the management roadshow, the timing and execution of the IPO has been overshadowed by global economic concerns. The company’s management has taken the view that, despite strong interest in the IPO, it is not in the best interests of the stakeholders to continue to pursue the listing at this time,” Cebu Air said.

Cebu Air pointed out that the delay in the IPO would not have any bearing on its expansion plans. 

The airlines also explained that the IPO has only been postponed and not withdrawn. “The company has every intention of returning to the public markets once market conditions permit,” Cebu Air said.

In view of this, Cebu Air said it had discontinued an international roadshow which began last week. 

Cebu Air hoped to raise up to P12.87 billion from the sale of 135.46 million shares at a maximum price of P95 each share.  The company planned to sell 70 percent of the offer shares to foreign investors with the listing of the shares originally scheduled on Feb. 8.