The Philippines' largest airline, Cebu Pacific, said Thursday it planned to raise approximately $500 million (P24.2 billion) through bonds and shares to help mitigate the effects of the coronavirus pandemic.
The airline told the stock exchange that it was planning to issue about $250 million worth of convertible preferred shares and raise another $250 million through a private offering of convertible bonds.
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Travel restrictions due to the health crisis have hit the airline industry hard. Cebu Pacific said it recorded revenues of P17.3 billion in the first six months of 2020, a 61.2% decline from the P44.7 billion it generated in the same period last year.
According to the company, around 44,000 flights were cancelled and 2.1 million passengers were affected from March 15 to June 30, 2020 alone. The country's largest budget carrier said that it is operating at only about 15 percent of its pre-COVID 19 operations.
"Due to this exceptional change in market conditions and industry dynamics, the Corporation saw the urgent need to fast track its transformation," it said. "It is currently implementing a business transformation exercise that involves right-sizing of network and fleet to meet new demand, and improvement of operations efficiency through process and policy enhancements and digitalization, among others.
In August, Cebu Pacific was forced to lay off 4,000 jobs or about 25 percent of its workforce.
Rival Philippine Airline has also posted massive losses this year. In the first six months, it reported a comprehensive loss of P22.02 billion or P19.01 billion higher than the P3.01 billion loss it reported in the same period last year.
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Cebu Pacific is a unit of the Gokongwei group, as is Summit Media Inc, which publishes Esquire Philippines.