Cebu Pacific says funds enough to keep it afloat

MANILA, Philippines — Cebu Pacific assured the public it has enough funds to survive and continue operations this year amid the continuing challenges brought by the COVID-19 pandemic.

Cebu Air Inc., the operator of the budget carrier, said the group has “sufficient financial resources to enable it to continue as a going concern for at least the next 12 months from December 31, 2020.”

“Based on management’s cash flow projections for the next 12 months, the group will maintain sufficient cash and cash equivalents from internally generated cash flows and available credit facilities to finance the group’s operations and pay its debts as and when they fall due,” Cebu Air said in its annual report filed with the local bourse yesterday.

Cebu Pacific’s business has been severely disrupted by the pandemic last year, resulting in significant deterioration of earnings and cashflows.

It reported a P22.2 billion net loss in 2020, a reversal of the P9.12 net income the previous year, with revenues plunging 73 percent year-on-year to P22.6 billion.

Cebu Pacific said the pandemic maycontinue to significantly disrupt its business activities.

As such, the company has undertaken various measures, including the implementation of comprehensive business transformation program, to address the impact of COVID-19 to its operational and financial performance.

“As of April 5, the group has undertaken various financing activities intended to ensure availability of sufficient financial resources to enable the group to continue as a going concern,” Cebu Pacific said.

“These include issuance and listing of preferred shares last March 29 securing a syndicated term loan facility with various domestic banks that is available anytime to the group for drawdown and availment of loan from affiliates,” it said.

The fundraising initiatives have provided Cebu Pacific with a cash runway of up to P28.5 billion.

For this year, Cebu Pacific expects delivery of seven more aircraft which will be a mix of Airbus and ATR fleet. These are on top of a new Airbus A321neo aircraft which it received last Friday.