PAL's parent moves to boost capital stock

MANILA, Philippines — Philippine Airlines' parent company is making moves to increase its authorized stock, in a bid to expand its valuation years after filing for bankruptcy in the middle of the pandemic. 

In a disclosure sent to the Philippine Stock Exchange on Tuesday, PAL Holdings Inc. said they submitted an amendment to their application to increase authorized capital stock. That amendment included additional share subscriptions.

The submission to the Securities and Exchange Commission was done on June 29.

Disclosure broken down revealed PAL Holdings received 323.77 million common shares in its flag carrier subsidiary. These shares were owned by “certain” creditors of the airline. 

Those shares came in exchange for 5.04 billion new common shares of PAL Holdings, priced at a rate of 15.57 PAL Holdings shares for every share of the airline. 

This share swap came on top of cash that PAL Holdings received as payment for shares that will be issued from the increased capital. 

The board of PAL’s parent firm already approved a move to issue up to 5.615 billion common shares in exchange for up to 360.66 million shares of the flag carrier. PAL shares were held by unsecured creditors. 

PAL Holdings clarified that only 5.04 billion of its new common shares will be issued to unsecured creditors of the airline. The disclosure explained this is because not all of those creditors participated in the share swap. 

As it is, the Tan-led airline and its parent firm made big waves in recent months. Lucio Tan III, the millennial grandson of tycoon Lucio Tan, will be taking over the helm of PAL Holdings and his family’s conglomerate LT Group. 

On the financial front, PAL Holdings' prospects are turning around. PAL’s parent posted a consolidated operating income of P17 billion in 2022. The figures were a reversal from the P4 billion operating loss it incurred in the preceding year.

Shares in PAL Holdings currently trade flat at P5.44 apiece as of 10:41 Tuesday morning. — Ramon Royandoyan