Cebu Pacific poised to list this year

MANILA, Philippines - Budget carrier Cebu Pacific is preparing to take off at the stock market this year as it restarts its stalled plans for an initial public offering (IPO).

Informed sources said Cebu Pacific, the country’s second biggest airline, has submitted to securities regulators a new application for an IPO, which is estimated to raise between $200 million to $250 million in fresh capital.

Cebu Pacific is looking to launch its much-awaited IPO before the elections - either late this month or in April, according to sources. 

The airline unit of Gokongwei flagship firm JG Summit Holdings Inc. has reportedly tapped Deutsche Bank as lead international underwriter as well as ING and First Metro Investment Corp. as underwriters for the domestic offering.

BJ Sebastian, JG Summit Holdings Inc. senior vice-president, confirmed that the airline is proceeding with preparations for the airline’s listing and that an announcement would be made “very soon.”

The new application replaces the earlier submission in which Cebu Pacific first sought permission to raise nearly P13 billion. Cebu Pacific was originally scheduled to list on the Philippine Stock Exchange in February 2008 but volatile market conditions and high crude prices forced it to postpone the IPO.

Prior to its decision to delay the offering, Cebu Pacific had said it generated positive feedback on the IPO plan from international and domestic investors in a roadshow.

Cebu Pacific is expected to use bulk of the cash to be raised from the IPO to buy new planes in order to fuel its ambitious growth plans.

The low-cost airline is aiming to double its existing fleet with plans to acquire 17 new aircraft over the next five years.

Cebu Pacific has flown over 40 million passengers since its inception in March 1996. It operates from four hubs (Manila, Cebu, Clark and Davao), using the youngest aircraft fleet in the Philippines composed of 21 Airbus A320 and eight ATR 72-500 aircraft.

It has a pending application to fly to Brunei and was considering other destinations like Australia, as well as new routes to Japan.

Cebu Pacific flies to 14 international destinations, including Hong Kong and Singapore (six-times daily services to both), Osaka, Incheon, Pusan (via Cebu), Taipei, Macau, Shanghai, Guangzhou, Kuala Lumpur, Kota Kinabalu, Bangkok, Ho Chi Minh and Jakarta. It has a total of 32 domestic destinations including Caticlan (Boracay), Dipolog, Cebu, Catarman and Calbayog in Samar, Tuguegarao and Cauayan in North Luzon, and Virac in Catanduanes.

Cebu Pacific swung back to profitability in the nine months ending September 2009 with net earnings reaching P1.78 billion as against a net loss of P1.87 billion in the same period a year earlier.

Gross revenues reached P16.22 billion, up 16.1 percent over the previous year’s P13.98 billion, mainly due to the opening of additional routes, increase in flight frequencies and capacity.

As of October last year, Cebu Pacific has flown nearly 7.3 million passengers, already surpassing the 6.7 million passengers flown in 2008.