27-Sep-2010 11:12 AM

Cebu Pacific advises indicative offer price

Cebu Pacific advised the Philippine Stock Exchange (PSE) it believes that the indicative offer price for the carrier’s common shares in its IPO will range between PHP110-135. As a result, the carrier could raise between USD467-743 million from the 186.6 million share offer (Reuters, 25-Sep-2010). CEB also has the option to sell a further 28 million shares if demand is strong. The carrier plans to use funds raised from the offering to acquire aircraft, while owner, JG Summit will use the sale mainly to repay debt. CEB expects a 25% year-on-year increase in traffic on international routes over the next two to three years and a 15% increase in domestic traffic. Revenue from international services is expected to increase from 30% to 50% in five years. The carrier is looking to further expand in major international markets, including China, Japan and South Korea and plans to launch services to Bali, Tokyo and Nagoya in the next two years. It plans to expand its fleet from 29 to 47 aircraft to allow for route network growth. It currently has firm orders for 22 A320s, to be delivered from Oct-2010, and has entered into an operating lease for another two A320s. CEB also has options for a further seven A320s, to be delivered between 2015 and 2017. [more]

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