5J to go public by October 8

Slates Roadshows for P32-B IPO at P150/Share

September 17, 2010

The Philippine Stock Exchange has approved the listing application of Cebu Air, the airline unit of JG Summit Holdings (operating under the brand Cebu Pacific Air), paving the way for its P32.19 billion initial public offering slated for October 12, 2010.

PSE documents show, Cebu Air will start its domestic roadshow on September 24, 2010, followed by its international roadshow and bookbuilding process on September 27, 2010.

While the firm has set an offer price ceiling of P150 per share, it will determine the final offer price and number of offer shares on October 8 after discussions among the company, the selling shareholder, and the lead manager.

Proceeds from the sale of new shares will be use for the payment of new aircraft.

The IPO will be the country’s first this year and the biggest since the SM Investment Corporation public offer.

Cebu Air said it is offering up to 214.63 million shares of which 30.66 million are new common shares and up to 155.98 million are existing shares owned by CPAir Holdings. There is also 28 million shares set aside as an over-allotment option. A maximum offer price is set at P150 a share.

Excluding the over-allotment shares, total proceeds to be raised by Cebu Air from the sale of the primary shares is estimated to be up to P4.56 billion while selling shareholders will raise up to P23.4 billion.

Net proceeds amounting to P4.47 billion will be used for the pre-delivery payments of aircraft and is expected to be disbursed in 2011 to 2012.

Cebu Air has tapped Citigroup Global Markets Limited, Deutsche Bank AG Hong Kong branch, and JP Morgan to be the joint global coordinators, joint book runners and international lead managers while ATR Kim Eng Capital Partners, Inc. will be the domestic lead underwriter.

According to Cebu Air president Lance Gokongwei, Cebu Air’s expansion plan calls for the addition of 22 aircraft over the next 4 and a half years.

The airline said it has firm orders for 22 Airbus A320 aircraft and has entered into operating lease agreements for two Airbus A320 aircraft.

“We have obtained options from Airbus for the purchase of seven Airbus A320 aircraft that are expected to be ready for delivery between 2015 and 2017, which will expire in December 2012,” Cebu Air said. - Manila Bulletin

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