Tanduay Holdings president Michael Tan. PHOTO FROM LUXURYMANILA.COM
MANILA, Philippines—Tycoon Lucio Tan is abandoning a plan to infuse his stake in flag carrier Philippine Airlines Inc. into holding firm LT Group Inc., his son Michael Tan said on Friday.
The younger Tan, who is also president of LT Group, said that adding PAL and budget arm PAL Express would only distract investors from the type of consumer story the conglomerate, reorganized just last year, was trying to build.
LT Group is involved in beer and liquor, tobacco, real estate and banking through Asia Brewery Inc. and Tanduay Distillers, Fortune Tobacco Corp., Eton Properties Philippines and Philippine National Bank, respectively.
“It [Philippine Airlines] is aviation. [LT Group] is more consumer-related, different from the basket,” Tan said. He said PAL, in which Tan’s family still owns a 49-percent stake, will continue to form part of the family holdings “but not LT Group.”
The rest of PAL is owned by conglomerate San Miguel Corp. (SMC), which entered the picture last year with the intention of bringing the country’s oldest air carrier back to profitability.
LT Group, formerly Tanduay Holdings Inc., had originally planned to acquire Tan’s PAL stake, based on a disclosure in July 2012. But the company announced the deferral of the acquisition three months later, citing the airline’s finances.
LT Group at that time was organizing its assets ahead of a landmark $920-million equity deal that was completed in April this year.
Tan and SMC’s PAL stakes are held through listed parent PAL Holdings Inc. The company, however, remains under trading suspension since the start of the year for noncompliance with the minimum 10-percent public ownership requirement of the Philippine Stock Exchange.