Cebu Air Inc., owner of the Gokongwei Group’s budget carrier Cebu Pacific, said Wednesday its board approved a restructuring plan that would wipe out P16.27 billion in retained earnings deficit due to recent losses.
The losses came in the wake of the COVID-19 pandemic that severely hurt the travel and tourism industry.
Cebu Air will use a significant portion of the listed company’s additional paid-in capital, totaling P20.66 billion at the end of 2023, to eliminate the retained earnings deficit.
After the financial restructuring, the remaining balance in the additional paid-in capital will amount to P4.39 billion.
This strategic initiative underscores Cebu Air’s commitment to enhancing its financial position and ensuring sustainable growth in the competitive aviation sector. The company aims to strengthen investor confidence and pave the way for future operational efficiencies.
Earlier this month, Cebu Air signed a binding memorandum of understanding with Airbus for the purchase of up to 152 single aisle A321 aircrafts for USD24 billion, based on the list price, in anticipation of future growth in the tourism and travel industry.
