Cebu Pacific Receives Financial Support From IFC, the IFC Emerging Asia Fund and Indigo Partners
Cebu Pacific has raised new liquidity of $250 million in the form of convertible bonds with support from the International Finance Corporation (IFC), the IFC Emerging Asia Fund and Indigo Partners.
On Monday (May 10, 2021), Cebu Pacific (CEB) announced that they have raised $250 million via convertible bonds with support from the International Finance Corporation (IFC), the IFC Emerging Asia Fund and Indigo Philippines LLC, an Indigo Partners affiliate. The additional liquidity will help the low-cost carrier recover from the impact of the global COVID-19 pandemic.
In Monday’s announcement, Cebu Pacific’s President and Chief Executive, Lance Gokongwei, said,
“We view Indigo, IFC, and IFC Emerging Asia Fund not only as capital providers but also long-term partners in driving improvements in the business, as well as accelerating our sustainability agenda. This will further strengthen CEB as we recover, so we may continue fulfilling our commitment to improve the lives of people in the communities we serve for a long time to come.”
Also commenting on the new financing arrangement, IFC’s Country Manager for the Philippines, Jean-Marc Arbogast, said,
“We are delighted to partner with CEB, a market-leading carrier and one the region's best-performing airlines. Maintaining low-cost travel services is essential in an island nation like the Philippines, and airlines will play a critical role in driving the country's economic recovery. CEB will play a leading role in that recovery, providing connectivity and jobs, preventing disruptions in supply chains, and supporting the tourism sector at a time when it's needed most.”
Indigo Partners, Managing Partner, Bill Franke, added,
“Indigo is excited to invest in CEB, and work with their team to take advantage of the many growth opportunities ahead as travel demand increases post-pandemic. We have a great deal of respect for what the Gokongwei family has achieved with the airline, and we look forward to a strong partnership.”
With an archipelago of over 7,600 islands, and a major tourist destination, the Philippines relies heavily on air travel. Cebu Pacific is the largest domestic and one of the leading international airlines in the country. In 2019, tourism contributed 12.7 percent to the Philippines’ GDP, while remittances, sent by Filipino workers abroad, generated a further 8.9 percent.
IFC has been an active investor in private airlines around the world in emerging markets with 19 investments since 2000 and has supported the expansion of GOL Airlines in Brazil and Volaris in Mexico. Indigo Partners specializes in aviation sector investments and is currently affiliated with Frontier Airlines (U.S.), Volaris (Mexico), Wizz Air (Europe) and JetSMART (Chile).
Source: Cebu Pacific