PAL to acquire 49% stake in Cambodia firm
Flag carrier Philippine Airlines (PAL) expects to complete its acquisition of a significant stake in Cambodia’s new national airline on July 15, the company announced this week.
In a disclosure on Monday, PAL, owned by conglomerate San Miguel Corp., also said it would infuse $10 million in Cambodia Air, on top of the 22 jet planes it would provide the new airline.
PAL will receive a 49-percent stake in the airline, which is being established “to contribute to Cambodia’s economic growth.” Conditions needed to close the transaction include the procurement by Cambodia Air’s management of all the necessary franchises to operate and maintain an airline.
As a flag carrier, Cambodia Air “shall be entitled to traffic rights and slots under bilateral agreements between Cambodia and other countries,” PAL told the local bourse.
Cambodia Air is currently owned by Inter Logistics Cambodia Co. Ltd. (ILC), which in turn is owned by Neak Okhna Meng and part of Cambodia’s Royal Group of Companies.
PAL president Ramon S. Ang last week said the company would deploy as many as 22 of the company’s planes—worth $1.5 billion—to Cambodia Airlines.
It was estimated that the company’s investment in the Cambodian company would boost PAL’s revenues by about $400 million.
PAL has an operating fleet of 45 planes. As part of its aggressive expansion program, the company expects to take delivery of at least 16 additional aircraft this year from European plane maker EADS.
Earlier this year, PAL’s parent firm PAL Holdings reported a net loss of P2.74 billion at the end of Dec. 31, 2012, less than the P3.59 billion the company lost in the same period a year earlier.
PAL benefited from cost-cutting measures and other revenue-enhancing measures implemented by SMC, which bought the company from the Lucio Tan group last year. San Miguel also controls PAL’s sister firm Air Philippines, which operates as the flag carrier’s budget brand, PAL Express.
