PAL aims to close Zuma acquisition within Q2


BusinessWorld Online

PAL HOLDINGS, Inc., listed operator of flag carrier Philippine Airlines (PAL), is expecting to complete the acquisition of shares from the holding firm that owns Air Philippines Corp. (APC) in the second quarter.

The listed company cleared late last year 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, Sr.

“The company’s acquisition of Zuma is ongoing and is expected to be completed within the second quarter of 2017,” PAL Holdings told the Philippine Stock Exchange on Thursday, part of a disclosure which detailed the equity restructuring of PAL Holdings.

Last March 30, PAL Holdings already announced its board of directors cleared an equity restructuring to wipe off its existing deficit and the additional deficit that will be incurred upon the acquisition of Zuma and its unit Air Philippines.

It will decrease its authorized capital stock to P18 billion divided into 30 billion common shares with a par value of 60 centavos per share, from P30 billion divided into 30 billion common shares with a par value of P1 per share, without returning any portion of the capital to stockholders.

PAL Holdings said then that it will use the resulting reduction surplus from the transaction, together with its existing additional paid-in capital and the additional paid-in capital that will be booked upon the completion of the Zuma acquisition to eliminate its projected deficit as of April 30 on a consolidated basis.

Earlier last month, PAL said it is proceeding with its plan to acquire shares from Zuma after securing the Philippine Competition Commission’s approval. The consolidation of Mr. Tan’s airline business was earlier seen to help increase the appeal of PAL to investors.

PAL President and Chief Operating Officer Jaime J. Bautista had said talks with a strategic airline investor to acquire “less than 40%” of the company is already in the “advanced” stage, with a deal seen within the first half of the year.

The strategic investor is expected to help PAL better manage its fleet and make it easier to reach five-star full service carrier status by 2020. PAL currently has a three-star rating.

Shares in PAL Holdings gained 20 centavos or 3.81% to close at P5.45 each on Thursday. -- Imee Charlee C. Delavin