PAL to list 15 billion shares today

Philippine Airlines [PAL 5.19 ?6.1%; 159% avgVol] [link] will list over 15 billion common shares today, representing roughly 56% of PAL’s total outstanding shares. The largest batch of these shares (10.2 billion shares) was issued to Lucio Tan’s Buona Sorte Holdings back in 2021 at a transaction price of ?1.25/share. The rest of the shares were issued to various creditors as part of PAL’s bankruptcy and subsequent deals as part of its restructuring, at a transaction price of ?1.00/share. Listing the shares is important because it gives the shareholder (in this case, Lucio Tan and a collection of nearly 50 creditors ranging from Philippine National Bank [PNB 29.35 ?0.2%; 6% avgVol] to manufacturers like Rolls-Royce PLC) the ability to trade the share on the PSE’s system.

MB BOTTOM-LINE:  The distinction here is that these shares are just being “listed”; they’ve already been issued and counted against PAL’s outstanding shares (the category of share that we use to determine voting rights and proportional ownership). And the important bit of detail is the sheer number of creditors (46) that will be receiving shares makes it likely that we’ll see one, some, or potentially all of those creditors attempt to sell those shares to cash-in on PAL’s price and recoup some of their losses. That means we should see selling pressure. I’m not sure how much selling pressure, but I can’t imagine there are a lot of companies interested in holding PAL much longer than they need to.

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