PAL secures PCC approval for Zuma share-swap deal
PAL HOLDINGS, Inc., listed operator of flag carrier Philippine Airlines (PAL), is proceeding with its plan to acquire shares from the holding firm that owns Air Philippines Corp. (APC) after securing the Philippine Competition Commission’s (PCC) approval.
“Please be informed that the Philippine Competition Commission has determined that the share-swap transaction between Zuma and PAL Holdings, Inc. will not result in a change of control of the acquired entity. As such, the PCC will not take any further action with regard to the transaction,” it told the stock exchange on Tuesday. PAL cleared on Nov. 28, 2016 the acquisition of Zuma Holdings and Management Corp., through a $166-million share-swap transaction, a move that will consolidate the airline business of taipan Lucio C. Tan.
Zuma owns 99.97% of APC or Airphil Express.
“With the foregoing, the undersigned company will proceed with the share swap transaction,” PAL Holdings said.
PAL Holdings said its board approved the share swap exchange ratio of 19 PAL Holdings shares to one Zuma share.
The consolidation of Mr. Tan’s airline business -- an endeavor that will help increase the appeal of PAL to investors -- is seen happening within the quarter, also subject to securing pre-requisite regulatory approvals from the Securities and Exchange Commission.
Upon approval by the regulators of the contemplated transaction, PAL Holdings will indirectly own APC or Airphil Express through Zuma as one of its subsidiaries, the company said, adding that its other direct subsidiary is the flag carrier PAL.
PAL President and Chief Operating Officer Jaime J. Bautista told reporters last week that the country’s flag carrier hopes to complete talks with a strategic investor this year and 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.
PAL expects to passenger volume to hit the 15-million mark this year, up 11% from the 13.5 million passengers flown in 2015.
PAL shares closed 1.79% lower to P5.50 each from its previous finish of P5.60. -- Imee Charlee C. Delavin