PAL confirms Lucio Tan talking to San Miguel for deal

Rappler.com
For the first time since December 2011, when diversifying conglomerate San Miguel admitted to the stock exchange that its top official is pursuing a deal with Philippine Airlines, PAL admitted on record that negotiations are involving its controlling owner, Lucio Tan, is ongoing

MANILA, Philippines – For the first time since December 2011, when diversifying conglomerate San Miguel admitted to the local stock exchange that its top official is pursuing a deal with Philippine Airlines (PAL), the local carrier admitted on record that negotiations are involving its controlling owner, Lucio Tan, is ongoing.   
 
“There has been a lot of chatter about ongoing negotiations for the sale of PAL shares. But I want to make it clear that any talks or negotiations are just between our principal shareholders and the SMC (San Miguel) group,” PAL president Jaime J. Bautista said in a statement on Friday, February 24, following an Agence France Presse report that reiterated the news that has been talked about in Manila for over 2 months.
 
“PAL management is definitely not part of it,” added Bautista, reiterating a position of the airline since the December reports on a brewing deal with San Miguel and eventually, another conglomerate, the Metro Pacific Investments Corp, which is led by businessman Manuel V. Pangilinan.

The AFP report reiterated Pangilinan as the other party that has reportedly expressed interest in the airline to Mr. Tan, the country’s second richest man.

PAL issued the Friday statement to stress that its spokesperson, Cielo Villaluna, was misquoted as having confirmed that PAL management is involved in the ongoing talks with the San Miguel group.
 
“Ms. Villaluna said talks are definitely ongoing, but didn’t say it was between PAL and SMC. She must have been referring to published reports about ongoing
negotiations between shareholders of the two companies,” said Bautista. He stressed that PAL is separate and distinct from its individual shareholders.

PAL, which once monopolized Philippine skies, has been reeling from financial and labor woes as markets continue to favor low-cost-no-frills services of budget carriers. Gokongwei-led Cebu Pacific Air has overtaken PAL in the top spot in the domestic market and is poised to go after the long-haul markets that PAL is currently profitable in.

PAL posted a P1.459 billion loss in October to December 2011, after its workers went on strike, resulting in cancellations of flights. It also cited higher jet fuel costs. Labor and jet fuel typically account for the biggest chunks of an airlines’ operating costs. – Rappler.com

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