CEB Officially Becomes Subsidiary of Indigo Partners
16 July 2021
Philippine Low Cost Carrier (LCC) Cebu Air Inc. is now officially an Indigo Partners subsidiary after the airline approves its convertible investment with the airline operator.
Together with investment approval is the appointment of new director in the name of Brian Franke from Indigo Partners LLC who acts as its managing partner.
He will be replacing Lisa Gokongwei-Cheng seat who had stepped down as company Director according to stock exchange filing yesterday.
Franke was Chairman and CEO of America West Airlines from 1993 to 2001, Chairman of Singapore-based Tiger Airways from 2004 to 2009, and Chairman of Spirit Airlines from July 2006 to August 2013. He then served as a member of the Frontier Airlines board of directors since December 2013.
He will be replacing Lisa Gokongwei-Cheng seat who had stepped down as company Director according to stock exchange filing yesterday.
Franke was Chairman and CEO of America West Airlines from 1993 to 2001, Chairman of Singapore-based Tiger Airways from 2004 to 2009, and Chairman of Spirit Airlines from July 2006 to August 2013. He then served as a member of the Frontier Airlines board of directors since December 2013.
He has been a principal of Indigo Partners LLC, a private equity fund focused on air transportation since 2004.
Indigo partners LCC has infused US$250 million investment in the form of convertible bonds together with International Finance Corporation (IFC), which is part of the World Bank, and an affiliate of the American private equity firm Indigo Partners, into ailing Cebu Pacific last April 16.
The number of underlying shares for the convertible bonds is 318.75 million common shares priced at PHP38 pesos (USD0.79) each. The closing of the transaction is “subject to post-signing deliverables, which the parties completed last month.
The bonds are part of a USD500 million capital raising effort Cebu Pacific Air announced in October 2020 to bolster its balance sheet amid the Covid-19 crisis. The company sustained a PHP22.2 billion (USD459 million) net loss for 2020, having carried just five million passengers during the year, down 78% from 2019.
Cebu Pacific is the fifth low cost airline funded by Indigo Partners, joining the ranks of Frontier Airlines, Volaris, Wizz Air, and JetSMART.
Indigo Partners is funding acquisition of all incoming aircraft of Cebu Pacific starting with the procurement of its latest Airbus A321neo aircraft.
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