PAL defers stockholders’ meeting as buyout talks drag on

MANILA, Philippines – PAL Holdings Inc., the parent company of legacy carrier Philippine Airlines (PAL), has postponed its annual stockholders’ meeting scheduled next month as buyout talks between taipan Lucio Tan and diversified conglomerate San Miguel Corporation dragged on.

In a disclosure to the Philippine Stock Exchange on Tuesdsay, August 19, PAL Holdings assistant corporate secretary Ma. Cecilia Pesayco said the company’s board of directors approved the deferment of the 2014 Annual Stockholders’ Meeting set on the last working day of September.

“[This is] in light of the ongoing discussions between the San Miguel Corp. Group and the Lucio Tan Group with respect to their indirect equity stakes in PAL Holdings, PAL, and Air Philippines Corporation,” Pesayco said.

She added that both parties asked for the postponement.

The Tan group wants take full control of PAL by buying back San Miguel’s 49% stake in the airline.

San Miguel president and chief operating officer Ramon Ang had confirmed that the Tan group made a formal offer to acquire the conglomerate’s stake.

He said though that negotiations were still ongoing. He said he was hopeful that talks would be completed within the third quarter.

Ang is president and COO of PAL, while Tan serves as chairman.

In April 2012, San Miguel’s wholly-owned subsidiary San Miguel Equity Investments Inc. bought 49% of Trustmark Holdings Corporation for $500 million. Trustmark owns 97.71% of PAL Holdings, which, in turn, owns 84.67% of PAL through PR Holdings Inc.

Following the acquisition, PAL embarked on a massive fleet renewal program, with the goal of taking in 100 brand new aircraft.

A source said negotiations regarding the buyback were expected to be completed in the next few weeks, paving the way for the return of management control to the Tan group.

The source said the parties were discussing the value of the buyout and the terms of payment.

After taking back full control of PAL, the source said the Tan group would likely get Abu Dhabi-based Etihad Airways as partner. The foreign airline is expected to buy a 40% stake in PAL.

PAL is back on the black as it booked a net income of P1.49 billion in the second quarter of the year, reversing its net loss of P1.08 billion in the same quarter last year. – Rappler.com