Lucio Tan to sell stake in PAL to San Miguel Corp.
DIVERSIFIED conglomerate San Miguel Corp. has sealed a deal to acquire the entire holdings of tycoon Lucio Tan in flag carrier Philippine Airlines (PAL), the Inquirer learned on Friday.
According to a source from the Lucio Tan camp, the transaction involves the acquisition by San Miguel of 51 percent of the airline currently owned by the tobacco and beer magnate.
$500M DEAL
The deal is valued at $500 million and, once executed, would give San Miguel president Ramon Ang complete control over the board of the country’s largest airline.
In April 2012, San Miguel also paid $500 million for a 49-percent stake in PAL Holdings Inc., which controls the airline. Under that transaction, the conglomerate infused $500 million in equity into PAL and was also handed management control over it.
With the leverage provided by the additional equity, the airline has since embarked on an aggressive expansion of its route network and launched a $7-billion refleeting program involving the purchase of at least 54 long- and short-haul Airbus aircraft.
Ang did not reply to queries about the transaction.
He had earlier initiated programs to revitalize the airline, which had struggled financially since the mid-1990s due to a confluence of adverse factors, not the least of which was the advent of the low-cost carrier airline model that its rival, Cebu Pacific Airways, successfully adopted. /inquirer.net
