PAL Holdings shareholders OK capital hike

MANILA, Philippines — PAL Holdings Inc., the listed operator of flag carrier Philippine Airlines, has secured approval from its shareholders to more than double the company’s capital base as well as issue new shares through a private placement.

In a stock exchange filing, PAL Holdings said its shareholders approved the increase in the company’s authorized capital stock to P30 billion from P13.5 billion.

The hike in its authorized capital will be supported by a private placement of Lucio Tan’s Buona Sorte Holdings Inc. (BSHI) worth $255 million or about P12.75 million.

PAL Holdings shareholders yesterday approved the issuance of 10.2 billion shares by private placement to BSHI, as well as the waiver of the requirement of the Philippine Stock Exchange to conduct public offering for the issuance of the new shares.

The P12.75 billion private placement represents the full and final payment of BSHI’s subscription to 10.2 billion new common shares at a price of P1.25 apiece.

PAL Holdings earlier said the increase of capital is aimed at accommodating the fresh infusion of capital into the company by an affiliate firm of the Lucio Tan group of companies.

The new capital will in turn be invested into subsidiary Philippine Airlines Inc. (PAL), pursuant to the court-supervised reorganization of the flag carrier.

“The business and operations of the issuer will not be affected by the proposed amendment. Only the capital structure of the issuer will change to reflect the fresh infusion of cash into the company. The new shares in support of the increase of capital will be issued at a premium over par,” PAL Holdings said.

PAL Holdings is the parent firm of flag carrier PAL. The publicly listed company is not included in the Chapter 11 filing of PAL last Sept. 3 in the US.

PAL’s restructuring plan includes the infusion of $505 million in long-term equity and debt financing from the company’s majority shareholder, alongside $150 million of additional debt financing from new investors.