Cebu Pacific Air (5J, Manila Ninoy Aquino International) will use paid-in capital to wipe clean a balance sheet deficit of PHP16.27 billion pesos (USD278 million), just weeks after signing a binding memorandum of understanding to buy more than 100 new aircraft.
While the July 19 Philippine Stock Exchange did not articulate a reason for the equity reorganisation, Manila's Daily Inquirer portal said it was because the carrier wants to clean up its balance sheet before taking on fresh debt to pay for the new aircraft. Cebu Pacific signed the agreement to buy 102 A320-200Ns with options for a further 50 A320N family aircraft earlier this month.
"The amount of deficit to be eliminated is PHP16,269,189,270 against the additional paid-in capital of PHP20,658,552,243 [USD354 million] from the company's audited financial statements as of December 31, 2023," the filing reads. "The total additional paid-in capital is composed of PHP9,232,370,549 [USD158.2 million] from additional paid-in capital from common shares and PHP11,426,181,694 [USD195.8 million] from additional paid-in capital from preferred shares."
The restructuring is intended to zero out the deficit as of December 31, 2023, and will leave the airline with PHP4.39 billion (USD75.2 million) in additional paid-in capital. The filing notes that the restructuring will not involve a change in the par value of Cebu Pacific’s shares, nor will it require any additional paid-in capital. Additionally, the restructuring will not change the number of Cebu’s issued, outstanding, or listed shares.
According to ch-aviation PRO airlines data, Cebu Pacific flies to 53 airports in 15 countries. Its current fleet includes nineteen A320-200s, nineteen A320-200Ns, seven A321-200s, fifteen A321-200NX, one A330-300, and eight A330-900Ns.
