On October 7, 2020 the Board of Directors of Cebu Air, Inc. (“CEB” or the “Company”) approved the conduct of a Stock Rights Offering (“SRO”) of US Dollar Denominated Convertible Preferred Shares for an aggregate proceeds of up to USD 250M.
On January 20, 2021, the Exchange approved the application of the Company for the listing of the Offer Shares and its underlying common shares. Subsequently, the Company in a disclosure dated February 4, 2021 under C00731-2021, informed the Exchange that “. . . in consideration of the possible limitations that potential eligible shareholders may face given the current rules and requirements imposed on dollar denominated securities (“DDS”) vis-à-vis the proposed application and payment process for the contemplated stock rights offer of the Company of up to US$250,000,000 convertible preferred shares (the “Offer”), the Offer has been redenominated from U.S. Dollars to Philippine Peso to allow wider participation from all potential eligible shareholders, particularly the retail shareholders of the Company.” CEB also disclosed the updated timetable of the said offer.
As indicated in the attached final term sheet:
“The Company is offering the Entitlement Rights for subscription to Eligible Shareholders (’Rights Offer’).
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The Entitlement Rights shall be issued from the Company’s increased in authorized capital stock (‘ACS’), subject to the approval of the SEC of the Company's ACS Application (as defined below under ’Application to Increase ACS’) for such increase, to be issued from the Company’s unissued capital stock. The Entitlement Rights shall rank equally among themselves, including the right to receive all dividends or distributions made, paid or declared. Such Entitlement Rights shall be issued subject to other conditions, including the approval by the SEC of the Company’s Application to Increase ACS and listing of the Entitlement Rights on the PSE. The application to Increase ACS has been preliminarily submitted to the SEC for evaluation. The additional documents required by the SEC, which can only be prepared and finalized after the end of the Rights Offer Period, will be submitted to the SEC promptly after the end of the Rights Offer Period to complete the filing of the application for the increase in the ACS of the Company.
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On October 7, 2020 and November 20, 2020, respectively, the Board of Directors and the stockholders of the Company approved the increase in the Company’s ACS from Php1,340,000,000 to Php1,740,000,000 divided into the following shares: (i) Php1,340,000,000 worth of Common Shares with a par value of Php1.00 per share; and (ii) the creation of new Convertible Preferred Shares amounting to Php400,000,000 with a par value of Php1.00 per share.”
If the application for increase is approved by the SEC, the shares subject of the SRO will be sourced from the increase in the Company’s ACS.
The proceeds from the SRO will be used to strengthen the Company’s balance sheet by providing liquidity to address its financial liabilities.
On February 16, 2021, CEB advised the Exchange of the following final terms of the SRO:
Entitlement Rights – 328,947,368 Convertible Preferred Shares
Offer Price – Php 38.00 per Entitlement Right
Dividend Rate – 6.00% per annum
Entitlement Ratio – 1:1.825
Attached is a copy of the Final Offer terms and conditions covering the Company’s SRO.
The Exchange’s approval of the listing of the Offer Shares and its underlying common shares is subject to the Company’s compliance with all applicable requirements and post-approval conditions of the Exchange.
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