MANILA, Philippines - Gokongwei-owned airline Cebu Air Inc. (CEB), the carrier of the Cebu Pacific brand, has deferred its initial public offering (IPO) and public listing until after the May 2010 elections.
Cebu Air president Lance Gokongwei told The STAR that they expect the elections to proceed smoothly and boost the timing of the IPO.
The company informed the Philippine Stock Exchange (PSE) yesterday that it has decided to reschedule its IPO. “It has taken the view that despite the strong interest in the IPO at this time, it is in the better interests of the stakeholders to pursue the listing after the elections,” it said.
Asked whether the IPO will be conducted before or after the country’s new president is installed, Gokongwei said they will seek advice from their bankers on the exact timing.
The domestic offer period was earlier scheduled to start on April 19 and end on April 26, with tentative listing date on May 3, 2010.
Of the P11.56-billion proceeds expected to be raised from the IPO, around P9.1 billion will be used for predelivery payments of aircraft and P2.45 billion for working capital and other general corporate purposes.
Gokongwei said the money that will be raised from the IPO will be used for the pre-delivery payments of 24 new Airbus aircraft that will be delivered between 2010 and 2014.
The PSE earlier approved CEB’s application for the initial listing of up to 728.22 million common shares on the main board of the exchange.
This will consist of 582.57 million common shares, representing the issued and outstanding shares of CEB prior to the IPO of the company’s shares; and 125. 25 million common shares, representing the common shares to be offered to the public on a primary basis.
The listing will also include 18.39 million common shares, representing the primary common shares to cover the company’s executive stock option plan; and two million common shares, representing the primary common shares to cover the company’s employee stock purchase plan.
Of the total number of shares approved for listing, up to 125.25 million will be primary common shares and 110.3 million secondary common shares. The total number of offer shares will be up to 235.56 million common shares while the over-allotment option is up to 35.33 million common shares.
Based on existing market conditions, the company, the selling shareholder (CP Air Holdings Inc.), and the lead issue manager expect the offer price not to exceed P95 per share.
CEB expects to carry 12.1 million passengers to and from Manila (total of 15 million including Cebu, Clark and Davao) by 2013.
“By 2012 alone, we expect to carry 13 million passengers system-wide as we take delivery of 10 new Airbus A320 aircraft in the next three years and expand to new domestic and international destinations,” CEB vice president for marketing and distribution Candice Iyog earlier said.
CEB’s total domestic traffic going through Manila reached 6.12 million last year, up 33 percent from the previous year’s 4.6 million. International traffic went up 29 percent from 1.06 million to 1.2 million last year while combined local and regional traffic reached 7.33 million, up 29 percent from 5.68 million in 2008.
This year, CEB expects to carry more than 10 million passengers on the domestic and regional fronts.
The company posted a net income of P1.82 billion for the first half of 2009, a complete turnaround from the P15.66 million net loss suffered during the same period the previous year.
CEB generated P11.39 billion in gross revenues from January to June last year, a 21.3 percent growth compared to the prior year’s P9.39 billion.
According to CEB’s parent company JG Summit Holdings Inc. the airline’s profitability was largely due to additional routes, increase in flight frequencies and capacity due to recently acquired additional Airbus A320 and ATR72-500.
CEB expects to be profitable for the whole of 2009, compared with a net loss of P3.26 billion in 2008.
It has programmed about $1 billion for the acquisition of 17 Airbus and two ATR aircrafts from 2009 to 2014.