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Lucio Tan says PAL Holdings to conduct re-IPO in 2nd quarter

BusinessWorld Online

THE COUNTRY’S flag carrier intends to push through with a plan to sell shares to the public this year, the Philippine’s second-richest man said.

PAL Holdings, Inc. Chairman Lucio C. Tan, Sr. said in an interview last week the airline operator can embark on the re-initial public offering (IPO) in the “second quarter” of the year. He did not elaborate.

PAL entered the Philippine Stock Exchange in 2007 via the “backdoor” with a takeover of Baguio Gold Holdings Corp. Proceeds from the share sale will bankroll its expansion.

PAL is undertaking a capital restructuring to clean up the company’s balance sheet, as it seeks the entry of a new investor group to help the company manage its fleet and reach five-star full service carrier status by 2020.

PAL can give up a stake equivalent to a maximum percentage allowable by law. Under the Philippine Constitution, foreigners cannot own more than 40% of certain industries, including transportation.

The company secured the approval of the Securities and Exchange Commission (SEC) for the valuation of shares for a proposed share-swap transaction with Zuma Holdings and Management Corp., another company controlled by the tycoon and owner of budget carrier Air Philippines Corp. The transaction will allow PAL to issue 19 shares for each Zuma share surrendered.

The consolidation of Mr. Tan’s airline business is a move seen helping increase PAL’s appeal to investors.

The corporate regulator likewise cleared the decrease of PAL’s authorized capital stock to P13.5 billion from P30 billion, resulting from the reduction in par value of each share to 45 centavos from P1.

The SEC further approved the increase in par value of each share to P1 from 45 centavos, as a result of the decrease in the number of shares corresponding to the authorized and subscribed capital stock of the company.

Despite higher revenues, PAL booked a comprehensive loss of P3.55 billion for the first nine months of 2017, a reversal of the P2.96 billion booked in the previous year, because of higher expenses as a result of the increase in flight frequencies and introduction of new routes. — Krista Angela M. Montealegre

 

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