PAL moves to comply with public float rule

PAL HOLDINGS Inc. has formally filed for an increase in its capital—a move which it says will pave the way for the entry of new investors while, at the same time, allowing it to comply with public ownership requirements and remain listed.

PAL Holdings, which owns and operates flag carrier Philippine Airlines, said it was seeking the approval of the Securities and Exchange Commission to increase its authorized capital to P30 billion from P23 billion. The filing was made on June 24, PAL Holdings said.

“The said application for increase in capital was filed by the company in order to accommodate the respective subscriptions of independent investor to shares of stock of the company and consequently, to comply with the minimum public ownership requirement of the exchange,” PAL Holdings said.

PAL Holdings currently has a public float of only 0.55 percent, way below the minimum 10 percent required by the Philippine Stock Exchange. It needed to address this within the month to avoid its delisting.

This developed as the group of tycoon Lucio Tan, which owns 51 percent of PAL Holdings, disclosed plans to unload its stake in PAL  to outside investors.

The rest of the airline is held by San Miguel Corp. which, however,  said it wasn’t buying the stake but had a right of first refusal. This means San Miguel Corp. can match a competing bid if it changes its mind.

San Miguel president Ramon Ang said early this month that he preferred a “strategic “ and “friendly” investor in PAL.

For its part, Tan’s group had said very little on the matter, noting in a Jan. 10 disclosure that it had been approached by investors for its 51-percent stake in the airline. It added that it was “seriously” looking into the proposal.

PAL Holdings last traded on Dec. 28 last year at P4.90 each, giving it a market value of P109.9 billion.