[February 11, 2007] Cebu Pacific readies initial public offering Tweet (Manila Standard Via Thomson Dialog NewsEdge) Cebu Air Inc., the airline unit of businessman John Gokongwei it hat operates Cebu Pacific, has asked the Securities and Exchange Commission to exempt it from paying a filing fee for its proposed increase in authorized capital in preparation for an eventual initial public offering. In a letter to the commission, Cebu Pacific legal counsel Romulo Mabanta Buenaventura Sayoc and Delos Angeles law firm sought the exemption as provided under Republic Act 7151. "RA [Republic Act] 7151 provides that any privileges and favorable terms, enjoyed by any of its competitors such as Philippine Airlines Inc. shall likewise be applicable to Cebu Pacific. Considering that the Department of Justice already opined the PAL is not obliged to pay SEC filing fees in connection with its increase in authorized capital stock, we believe that Cebu Pacific is likewise exempt from paying such SEC filing fees," the law firm said. The law firm did not give details of the planned capital increase and initial public offering. But company officials said the airline was mandated to conduct IPO with a 10-year period from the start of operations. Cebu Pacific, the country's second-largest carrier, earlier said it planned to sell between 30 percent and 40 percent of its shares through an IPO by 2008. Revenues rose to P6.64 billion in the first nine months of 2006, up 13.8 percent from over P5.83 billion a year ago. But cost and operating expenses also increased by 11 percent to P6.58 billion from P5.91 billion brought about by higher depreciation in the acquisition of new airbus and higher aircraft lease. Net income reached P293 million, a complete turnaround from a P77.3-million net loss in 2005. Cebu Pacific operates brand new Airbus fleet, with two A320s and 10 A319s. The last two A320s will arrive within the first quarter. PAL, meanwhile, is expected to list at the stock exchange, through a backdoor listing using Baguio Gold Holdings Inc. as the corporate vehicle. PAL and Baguio Gold are both owned by beer and tobacco tycoon Lucio Tan. The commission early this month approved the increase in authorized capital stock of Baguio Gold to P20 billion from P400 million to reflect the entry of the PAL into the company. Baguio Gold changed its corporate name to PAL Holdings Inc. Jenniffer B. Austria Copyright 2007 Manila Standard. Source: Financial Times Information Limited. [ Back To TMCnet.com's Homepage ]