Market still not conducive for IPO

PNB Holdings Corp., a wholly-owned subsidiary of the Philippine National Bank, is ready to conduct an initial public offering, according to Carlu Fernandez, Philippine Airlines’ general counsel, but market conditions are still not conducive to an IPO at this time.

In an interview last week on the sidelines of PAL’s launch of its new Manila to Seattle route in October this year, Fernandez revealed that PHC continues to prepare for its planned IPO.

“We are essentially in the process of listing…it’s coming up…but it will depend on the market. We are ready to list, but the market is not good…the real estate market is not very good. We don’t want to list until conditions are right,” he said.

The global equities market has not been doing so well due to the high interest regime being maintained by most global banks. Thus, even the Philippine equities market has seen a number of companies delaying their planned IPOs.

Unfortunately, Fernandez estimates that it could still take “one to two years” for the market to be conducive to a successful IPO.

PHC was established on May 20, 1920 to invest, sell, transfer, or exchange all kinds of stocks, bonds, certificates of deposit, property or assets and earn from its assets.

It serves as a holding company which invests, develops and sells all kinds of assets, majority of which are prime real estate properties. Its vision is to focus on maximizing earnings from its current prime assets, which already generates a stable recurring cash inflow while taking advantage of future development opportunities.

Its three major properties are the PNB Financial Center along Macapagal Avenue in Pasay, the PNB Makati Center in Ayala’s Central Business District and a prime undeveloped property at the corner of Buendia Avenue and Paseo De Roxas beside One Roxas Triangle and the Metrobank former head office, also in Makati.

Redevelopment plans for the three major properties, however, Fernandez admitted remain fluid.

“Redevelopment of Macapagal and Makati depends pa… its very fluid. PHC has no business plan or strategy yet. It is all being prepared pa…” Fernandez said.

In April 2021, PNB stockholders received property dividends issued by PHC which PNB said is part of its plans to dispose of its low-earning assets, strengthen its capital position and improve its ability to generate more revenues in the years to come.

PNB stockholders can cash in on their dividends by selling their shares in the PSE once PHC is listed. The sale of their shares in the PSE would supposedly result in the best market price and lowest cost for the stockholders. They may also opt to buy additional shares if they wish to benefit more from the long-term growth of PHC.

NAIA to remain PAL hub

Tan-owned Philippine Airlines president and COO Capt. Stanley Ng sees the Ninoy Aquino International Airport (NAIA) remaining as PAL’s international hub until 2028 at the earliest, even with the plans of Ramon Ang to develop the Bulacan international airport.

He assured stakeholders that once the Bulacan international airport is completed and becomes operational, PAL is prepared to use the new airport facility.

“If that happens, we are prepared for that…If certain that will happen, we will probably order more planes for that airport…but there are still a lot of uncertainties. NAIA will still be the home of PAL,” he said.

NAIA is set to finally undergo rehabilitation following the recent awarding of the rehab contract to Ramon Ang’s SMC-led consortium.

Based on his observation, Capt. Ng also noted that while passenger demand has picked up, there is still a global constraint on supply of parts for aircraft engines that has been bugging the airline industry.

European aircraft manufacturer Airbus has been particularly affected with servicing of its Pratt & Whitney engines.

Likewise, American aircraft manufacturer Boeing is also undergoing a major upheaval following several “accidents” with its aircraft, leading to the resignation of its chief executive officer.

PAL’s current fleet comprises both Airbus and Boeing airplanes.

According to him, “We still have to deal with that and it will take a while…it may take years to stabilize.”