Key Sentence:
- Billionaire Lucio Tan is poised to inject new capital into Philippine Airlines cashless.
- After PAL Holdings approved an increase in share capital from P13.5 billion to P30 billion ($586 million) this week.
“The purpose of the proposed increase in the issuer’s authorized Tycoon Lucio Tan capital is to secure a new capital injection into the company from an affiliate of Lucio Tan’s group of companies. PAL Holdings told in a statement to the Philippine Stock Exchange on Tuesday. “The new capital will, in move, be invested in the issuer’s subsidiary, Philippine Airlines, under PAL’s reorganization of judicial regulations.”
Tan’s recent capital injection was critical to a restructuring plan that PAL unveiled this month as part of a US bankruptcy filing. That will pave the way for the airline’s recovery in the face of mounting losses from the pandemic’s global travel restrictions. Tan holds a 76.9% stake in Philippine-listed PAL Holdings, during Japanese airline ANA Holdings holds a further 9.5%.
According to the plan, PAL’s creditors agreed to reduce the company’s debt to 2 billion debts from new investors.
The plan allows PAL to cope with the unprecedented impact of the global pandemic, Tycoon Lucio Tan said Tan, 87. As a result, the International Air Transport Association estimates airlines worldwide will lose about $48 billion this year. After losing about $126 billion last year.
PAL, which reported a record net loss from 73 billion pesos in 2020, has continued to struggle this year. Suffering another net loss of 16.6 billion pesos in the first half ended June 30.
Tan – who became a same shareholder in PAL in 1995 when he was appointed chairman. Regained control of PAL in 2014 after acquiring a majority stake in San Miguel Corp. on the airline. With a net worth from $1.9 billion, Tan has ranked 12th in the Philippines’ 50 Richest People List published earlier this month. His business empire includes tobacco, liquor, banking, and real estate.