The Philippines’ second-largest airline group, Cebu Pacific, has received regulatory approval to have an initial public offering (IPO) that aims to raise as much as 32.19 billion pesos ($728 million).
The stock exchange says it has granted approval for the IPO in which 31% of the carrier’s shares will be sold at a price not exceeding 150 pesos.
The IPO will raise as much as 32.19 billion pesos, making it the largest IPO in the Philippines’ corporate history, say local news reports. Seventy percent of the shares on offer will be sold to international investors and the rest to local investors, says the stock exchange. The offer price and number of shares will be decided on Oct. 8 and the tentative date for listing is Oct. 25.
Cebu Pacific was established in 1988 and claims to be Asia’s first low-cost carrier. It operates 21 Airbus A320-family aircraft and eight ATR 72-500s, with another 22 A320s on order, according to Ascend data. The A320s on order are for fleet expansion and to replace older A320s on lease, say industry executives.
Cebu Pacific started as a domestic airline, but in recent years has expanded internationally and now services 16 international destinations. The carrier had revenue of $502 million in 2009 and a net profit of $70 million.
It was originally planning to have its IPO in 2008 but shelved it due to the global financial crisis. The Filipino-Chinese Gokongwei family control Cebu Pacific via its Philippine business conglomerate SG Summit. They are already one of the richest families in the Philippines with interests in telecommunications, financial services, petrochemicals, power generation and livestock.