Tuesday, 16 March 2010

Cebu Pacific plans to increase fleet to 47 planes in 5 years

Manila Bulletin

Cebu Air, the airline unit of JG Summit Holdings Inc. under the brand Cebu Pacific, intends to increase its fleet size to 47 planes by 2014 from the current 29 and has firm orders for 15 Airbus A320 aircraft, options for five Airbus A320, operating lease for two Airbus A320, and plan to acquire two more Airbus A320 through lease or purchase.

The firm said the additional planes will support its plans to increase frequency on current routes and to add new city pairs and destinations. Over the next two years, the airline plans to add new international destinations such as Brunei, Beijing, Denpasar, Fukuoka, and Nagoya, and new domestic destinations such as Pagadian and Marinduque.

Cebu Air Inc. is planning an initial public offering of new and secondary shares worth about P25.74 billion to help finance the acquisition of new Airbus 320s.

Proceeds from the primary portion of the IPO, estimated at P11.9 billion will be used for pre-delivery or down payments for new aircraft, working capital and general corporate purposes including fuel and flying operations-related expenses, maintenance, passenger services, staff expenses and other related items.

Based on the firm’s registration statement filed with the Securities and Exchange Commission (SEC), Cebu Air said it is selling 125.25 million new shares while CPAir Holdings is selling 110.31 million shares plus 35.33 million optional shares. The firm has given an indicative price of P95 per share although JG Summit corporate planning director Bach Johann Sebastian said “that’s only an indicative price that we placed in our filing.”

He noted that “it is required by the SEC that we indicate any price. But in offerings like this, we’ll determine the price from a formal book building exercise which can only start after our filing is approved by both the SEC and the PSE (Philippine Stock Exchange).”

Cebu Air said 164.89 million shares will be sold overseas outside of the United States, 47.11 million shares are being sold through brokers of the PSE while 25.56 million shares have been allocated for local small investors.

The airline has tapped Deutsche Bank AG, Hong Kong Branch and J.P. Morgan (S.E.A) Limited to be the international lead underwriters for the issue while ATR KimEng Capital Partners is the domestic lead underwriter.

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