PAL to pay $10-M for 49% stake in Cambodia Air

MANILA, Philippines – Philippine Airlines (PAL), the joint venture of tycoon Lucio Tan and conglomerate San Miguel Corp., is spending $10 million for a 49% stake in Cambodia Airlines Co. Ltd.

PAL Holdings Inc. assistant corporate secretary Ma. Cecilia Pesayco informed the Philippine Stock Exchange on Monday, May 27 that the legacy carrier would shell out said amount to buy 49% of Cambodia Air from Inter Logistics (Cambodia) Co. Ltd. (ILC).

ILC is 100% owned by Royal Group of Cambodia chair Okhna Kith Meng.

Pesayco said PAL would make a downpayment of 10% or $1 million once closing conditions are completed by July 15. The balance of $9 million would be paid upon the call of the board of Cambodia Air.

She said the closing conditions include the registration of the investment of PAL in Cambodia Air as well as the procurement by Cambodia Air of all the necessary franchises, permits, and licenses to operate and maintain an airline company.

Pesayco said PAL’s board of directors approved the investment in Cambodia Air last April 25.

Early last month, PAL president and chief operating officer Ramon Ang went to Phnom Penh to sign a joint venture agreement with Kith Meng formalizing PAL’s first international airline venture.

Cambodia Airlines would compete with Cambodia Angkor Air controlled by the Cambodian government in a partnership with Vietnam Airlines.

Ang earlier said PAL would deploy 16 to 22 aircraft worth $1.5 billion to equip the fleet of Cambodia Air. Eight to 10 of these aircraft would be deployed within the first year of operations.

Ang said the joint venture would boost PAL’s revenues by $300 million to $400 million. – Rappler.com