PCC clears PAL share swap

MANILA, Philippines -  The parent firm of Philippine Airlines (PAL) said its planned share swap in relation to the acquisition of Zuma Holdings & Management Corp. and consolidation of carriers owned by tycoon Lucio Tan has been cleared with the Philippine Competition Commission (PCC).

In a disclosure to the Philippine Stock Exchange, PAL Holdings said the PCC has determined the share swap between Zuma and PAL Holdings will not result in a change of control of the acquired entity.

As such, the PCC will not take any further action with regard to the transaction.

“With the foregoing, the undersigned company will proceed with the share swap transaction,” PAL Holdings said.

Earlier, PAL Holdings said the share swap transaction would require approval of the PCC as well as the Securities and Exchange Commission.

Under the transaction, PAL Holdings will acquire Zuma which owns budget carrier Air Philippines, for P8.24 billion by issuing new PAL shares valued at P5 apiece from its authorized but unissued capital stock.

Zuma is 60 percent owned by Cosmic Holdings Corp. and 40 percent owned by Horizon Global Investments Inc.

PAL Holdings will issue 19 shares for each Zuma share held by Cosmic and Horizon.

PAL Holdings said the transaction and integration of the two airlines would enable streamlining of processes as well as improving the transportation experience of the riding public, reducing costs and increasing revenues.

“The exercise is intended to address the highly competitive nature of the industry since the integration of both businesses into a single organizational structure would make PAL (Holdings) a more viable investment for interested investors and enable the same access funds to expand the business,” PAL Holdings said.

Flag carrier PAL is currently looking to bring in a strategic investor to help grow its presence as well as compete with global players.