The buyback involves common and convertible preferred shares, with no fixed allocation between the two types. Since 2011, the airline giant has bought back 12.9 million common shares worth about P950.9 million.
Lagging share price
Cebu Air shares, currently valued at about P31 per share, are down 4.6 percent since the start of the year and over 67 percent from five years ago.
Stock buybacks can strengthen the share price by reducing the supply of shares, which in turn boosts earnings per share.
Major buyback deal
Assuming the entire amount is used to buy back common shares, it would equal 10 percent of the company’s current market value.
The buyback will use internal funds and remain effective until the full amount is utilized or as determined by the board.
“This program underscores the company’s commitment to enhancing shareholder value while maintaining operational stability,” Cebu Air said in a stock exchange filing.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
