Tan still in talks for sale of PAL stake

MANILA, Philippines - Tycoon Lucio Tan said he is in talks with possible buyers of his stake in flag carrier Philippine Airlines.

He said he is open to selling his 51 percent stake in the PAL Holdings Inc., the parent firm of the airline, to local and foreign buyers.

“Local and foreign…It depends on the offer,” he told reporters on the sidelines of the Bangko Sentral ng Pilpinas 20th anniversary celebration when asked to identify the possible investors he was in talks with. He did not identify them and he did not say when a deal might be sealed.

Tan, chairman of PAL, said he is selling his stake in the airline because of labor problems.

“The union,” Tan said when asked for the reason why he is getting out of the airline business.

PAL has faced massive labor problems with strikes from ground crew, pilots and flight attendants.

In a statement in April, PAL said that after years of negotiations, it has signed a memorandum of agreement (MOA) with the Flight Attendants and Stewards Association of the Philippines (Fasap) for the 2010-2015 collective bargaining agreement (CBA), that would translate to an increase in their salaries.

In 2010, the airline terminated 2,600 employees because of a spin-off of some functions such as ground handling and reservations.

Last year, San Miguel Corp., bought a 49 percent stake in PAL Holdings and is currently operating the company for $500 million.

In June, PAL Holdings said in a disclosure that investors have approved Tan’s holding firm, LT Group, for the acquisition of Tan’s controlling stake in PAL.

A company source said the new investors would likely be a group of foreign and local investors.

This developed as Tan said he was not open to selling Philippine National Bank (PNB), which is among the businesses of the LT Group together with Fortune Tobacco, Asia Brewery Inc., Eton Properties and Tanduay Distillers, Inc.