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27
Sep

PAL restructuring approved

Written by bh0ngg. Posted in News

PAL, through listed operator PAL Holdings, had signaled its intention to sell a minority stake to a foreign airline group.

A deal was expected to close within the year although this could stretch into 2018, PAL president Jaime Bautista had said.

He did not immediately respond to a request for comment on Tuesday.

Restructuring PAL’s equity, which will wipe out an old deficit, was a step in this direction.

According to PAL, the Securities and Exchange Commission approved the reduction of its authorized capital by a third to P13 billion.

It said this would “eliminate the deficit which accumulated due to the company’s losses prior to its recent three-year period of profitability.”

A clean balance sheet will help facilitate the entry of an investor group, which could acquire under 40 percent of PAL Holdings.

The added financial muscle and international network of a foreign partner will help PAL realize its goal of becoming a five-star carrier.

It is currently ranked a three-star carrier by Skytrax.