San Miguel infuses P1B in Philippine Airlines

Conglomerate San Miguel Corp. has infused P1 billion in cash into flag carrier Philippine Airlines (PAL) as the group prepares to set up a new airline in Cambodia.

In a disclosure, San Miguel said the flag carrier had issued five billion common shares to its publicly listed parent firm PAL Holdings Inc.

The shares were taken out of the airline’s authorized but unissued capital stock.

With a par value of 20 centavos apiece, the shares would amount to P1 billion.

“The said subscription constitutes only a portion of the P17 billion total cash investment of (San Miguel) in PAL,” the disclosure read.

Last January, the Securities and Exchange Commission (SEC) approved an increase in PAL’s authorized capital stock to a total of 100 billion shares at 20 centavos apiece, to give the company a total par value of P16 billion.

San Miguel owns 51 percent of PAL’s parent firm PAL Holdings through subsidiary Trustmark Holdings Inc.

Earlier this week, San Miguel announced that it had struck a deal to help set up a new airline in Cambodia, in a partnership between PAL and local tycoon Okhna Kith Meng.

The conglomerate said a joint venture with Kith Meng was formed to create Cambodia Airlines, in which PAL would hold a 49 percent interest.

The creation of a new airline in Cambodia will be separate from PAL’s current expansion plans in the Philippines, involving the acquisition of as much as 100 new aircraft from European and American plane manufacturers.

PAL president Ramon S. Ang earlier said 16 of the new planes would arrive this year.

The new aircraft would include eight Airbus A321 narrow-body planes and Airbus A330 wide-body, long-range jets.

The company plans to use the new aircraft to strengthen its regional operations and expand into new long-haul markets, such as Europe, and new destinations in the United States and Australia.

The bulk of PAL’s domestic operations are operated by affiliate Air Philippines, operating as PAL Express.