Cebu Pacific to go Public


Re-test IPO market by April

by Jenniffer B. Austria
Justify Full
March 9, 2010

CEBU Pacific Air is going ahead with its initial public offering to raise up to $250 million to buy new aircraft, and has tapped JP Morgan and Deutsche to underwrite it, industry sources said over the weekend.

The international offering was planned for the last week of March or early April, and it could be the biggest since San Miguel Brewery went public in 2008, when it raised $147 million, the same sources said.

The budget carrier will offer 235.56 million shares of which 125.25 million shares will be primary shares and 110.31 million shares will be secondary shares, according to sources from the Securities and Exchange Commission.

“Cebu Pacific did not a set an indicative price, but the public offering will raise between $200 [million] and $250 million,” one of the sources said.

The Gokongwei family-owned Cebu Pacific was supposed to go public in 2008, when it had planned to sell 135 million shares at P95 a share. It tapped First Metro Investments Corp. for the domestic offering and UBS AG as the lead international underwriter, but it deferred the offering in the middle of its roadshow due to market uncertainties.

Earlier, the airline said it intended to use most of the proceeds from its offering to acquire new aircraft.

The carrier grossed P16.22 billion in the first nine months of 2009, a 16.1-percent increase from a year earlier, as a result of additional routes and frequencies and an increase in capacity.

Costs and operating expenses rose to P14.28 billion from P13.23 billion, but the airline gained P25.65 million from the peso’s appreciation against the dollar compared with a loss of P1.57 billion in 2008.

As a result, Cebu Pacific made a turnaround and posted a net income of P1.78 billion against a net loss of P1.87 billion.

The airline will be the fifth Gokongwei company to be listed in the Stock Exchange if the planned offering goes ahead. The four others are the holding firm JG Summit Holdings Inc., Robinsons Land Corp., Universal Robina Corp., and Digital Telecommunications Inc.

Cebu Pacific flies to 26 domestic destinations and 10 international routes. It operates one of the youngest fleets in Asia with an average aircraft age of 15 months.

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