The group of tycoon Lucio Tan has submitted to San Miguel Corp. a formal proposal to buy back the latter’s 49-percent stake in Philippine Airlines (PAL) in a bid to consolidate control of the flag carrier.
“We are waiting for SMC’s reply to our proposal to buy them out. We sent [the] proposal yesterday (Friday),” said a source from the Tan group.
SMC and the Tan group were scheduled to meet Friday to discuss the latter’s buyout proposal. Asked about the Tan group’s buyout proposal, SMC president Ramon S. Ang said in a text message on Friday: “Still in talks.”
Ang confirmed that he has received the buyout proposal from the Tan group, but added that proposed term payment was “matagal (too long).” He said talks would continue.
The Tan group sold a 49-percent stake in PAL to SMC in 2012 to support the airline’s fleet modernization program. This stake was also vested with management control, which the tycoon’s group can reclaim once it buys back the stake from SMC.
Sources earlier estimated that the LT group would need to raise about $1 billion to pay back SMC’s equity and cash advances to PAL. Doris C. Dumlao