Philippine budget carrier Cebu Pacific intends to raise 260 million dollars in an initial public offering to beef up its fleet and corner a bigger market share, its parent firm said Wednesday.
The offering, the date of which is still to be set, is expected to raise about 12 billion pesos (260.86 million dollars), Bach Johann Sebastian, senior vice president for corporate planning of JG Summit, told AFP.
"We've already filed a notice with the SEC (Securities and Exchange Commission), but no date has yet been set for the IPO," Sebastian said.
JG Summit Holdings is the parent firm of Cebu Pacific. Both companies are owned by taipan John Gokongwei, whose family is one the country's 40 richest, according to Forbes magazine.
Sebastian said the bulk of the IPO's proceeds would go to acquiring 15 new Airbus 320 aircraft in the next five years, with an option to add five more.
The potential acquisition of 20 new aircraft would increase its fleet to 49, allowing it to boost both domestic and international operations.
"We already have a purchase order. These will come in in the next five years," he said. "We want to have a bigger market share."
Sebastian did not say how much of the IPO's proceeds would go to spending on the new fleet, but local press reports said the firm had earmarked about 9.1 billion pesos for the purchase.
Cebu Pacific first planned to publicly list in 2008, but the global financial crisis forced it to temporarily shelve the idea.
Cebu Pacific is a low-fare, no frills airline that began in 1996 and serves more than 30 destinations in the Philippines, according to its website.
It launched its international operations in 2001 and now flies to Bangkok, Busan, Guangzhou, Ho Chi Minh, Hong Kong, Jakarta, Kota Kinabalu, Kuala Lumpur, Macau, Osaka, Seoul, Shanghai, Singapore and Taipei.
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Initial Public Offering - IPO
What Does Initial Public Offering - IPO Mean?
The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), the best offering price and the time to bring it to market.
Also referred to as a "public offering".
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Investopedia explains Initial Public Offering - IPO
IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future because there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, which are subject to additional uncertainty regarding their future values.
