Tan, SMC to finalize PAL stake sale next yr

MANILA, Philippines - Negotiations for the sale of the majority stake in flag carrier Philippine Airlines Inc. (PAL) with San Miguel Corp. (SMC) are expected to be finalized by next year.

PAL chairman and chief executive officer Lucio Tan told reporters in a chance interview yesterday that his group is in talks with SMC for the sale of the 51-percent stake in the airline.

He said he expects the negotiations for the sale to be completed “by early next year.”

Should Tan’s group decide to sell its 51-percent stake to SMC, the carrier will become wholly-owned by SMC which currently holds a 49-percent share.

In April last year, SMC infused $500 million for the purchase of a 49-percent equity interest in Trustmark Holdings Corp.

Trustmark owns 97.71 percent of the airline’s parent firm PAL Holdings Inc., which owns 84.67 percent of PAL through PR Holdings Inc.

The carrier has embarked on a refleeting program since SMC’s entry.

The refleeting program involves the acquisition of 100 new aircraft in preparation for its flights to Europe and additional flights to the US.

PAL expects to save as much $400 million from fuel and maintenance costs each year as part of the refleeting program.

It now operates a fleet of 48 aircraft composed of 10 Airbus 330-300, 12 A320-200, eight 340-300, five A321-231, four A319-100, five Boeing 777-300ER and four 747-400.