Gokongwei-led Cebu Air Inc. is considering issuing $250 million worth of convertible preferred shares to raise capital to help it survive a sharp travel downturn brought about by the coronavirus pandemic.
In a stock exchange filing, Cebu Air said its board approved the sale of convertible preferred shares via a stock rights offering to allow the airline to implement its business transformation program.
“The airline industry faces significant challenges as a result of unprecedented events outside the control of the corporation brought by the COVID-19 pandemic. Travel restrictions imposed by various governments, both local and abroad, have led to abrupt reduction in passenger traffic for the corporation and casts uncertainty over the near term prospects of the corporation despite its market leadership,” Cebu Air said.
Cebu Air is laying off workers to reduce cost as it looks to rightsize its workforce and fleet to meet new demand. It is also streamlining operations operations efficiency through process and policy enhancements and digitalization to better address the needs of the public.
The budget airline suffered a P9.14 billion loss in the first half, a reversal of the P7.15 billion profit booked in the same period a year ago as revenues plunged due to travel restrictions across the world.
By: Bilyonaryo.com.ph
Source: Peso Economics
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