PAL Holdings to hike capital

MANILA, Philippines - The parent firm of national flag carrier Philippine Airlines (PAL) is seeking the green light from the Securities and Exchange Commission (SEC) to beef up its capital stock to comply with the minimum public ownership requirement of the Philippine Stock Exchange (PSE).

PAL Holdings Inc. assistant corporate secretary Ma. Cecilia Pesayco said in a disclosure to the Exchange that it has filed an application with the SEC to increase its authorized capital stock to P30 billion from the current P23 billion.

The application to increase its capital stock by P7 billion was filed with the SEC last Monday.

Once approved, the airline’s authorized capital would consist of 30 billion common shares with a par value of P1 per share.

Pesayco said the additional capital would be sold to investors to comply with the 10 percent minimum public ownership set by the PSE.

PAL Holdings has until the end of the month to comply with the requirement otherwise it would be delisted from the stock exchange.

“The said application for increase in capital was filed by the company in order to accommodate the respective subscriptions of independent investors to shares of stock of the company, and consequently, to comply with the minimum public ownership requirement of the Exchange,” Pesayco said.

PAL, jointly owned by taipan Lucio Tan and diversified conglomerate San Miguel Corp. (SMC), has a public float of just 0.55 percent. The PSE suspended the trading of seven firms including PAL last January due to their failure to meet the required minimum public ownership level of 10 percent.

PAL president and chief operating officer Ramon S. Ang said earlier the company would comply with the minimum public float via a share sale through Tan-owned Philippine National Bank (PNB).

Since SMC acquired a 49 percent stake in PAL Holdings worth $500 million in April last year, the national flag carrier embarked on an aggressive re-fleeting program aimed at acquiring 100 new aircraft.

PAL has an existing fleet of 45 aircraft composed of 19 Airbus A320-200, eight A330-300, four A319-100, four A340-300, five Boeing B777-300ER, and five Boeing 747-400.

The airline entered into a $7 billion contract with the EADS Group in August last year for the acquisition of 54 Airbus aircraft consisting of 34 A321ceo, 10 A321neo, and 10 A330-300s and another $2.5 billion contract in Sept. to exercise an option to acquire 10 more A330 aircraft.

Tan’s LT Group is looking at divesting its remaining 51 percent stake in the country’s oldest airline to a group of strategic investor.

“We have been advised by the LT Group that the latter is in talks with a group of investors who have expressed an interest to purchase such majority interest of the LT Group in PAL and PAL Holdings Inc.,” SMC earlier said in a disclosure.

Late last month, LT Group president Michael Tan announced that PAL would no longer be consolidated into the listed umbrella firm of the Tan family.

The LT Group wants to focus on being a consumer-related conglomerate through units Asia Brewery Inc., Tanduay Distillers Inc., Eton Properties Philippines Inc., Philippine National Bank and tobacco firm PMFTC Inc.