Flag carrier Philippine Airlines Inc. has obtained regulatory approval to restructure its equity—a development that it expects will make it more attractive to investors.
PAL, through listed operator PAL Holdings, had signaled its intention to sell a minority stake to a foreign airline group.
A deal was expected to close within the year although this could stretch into 2018, PAL president Jaime Bautista had said.
He did not immediately respond to a request for comment on Tuesday.
Restructuring PAL’s equity, which will wipe out an old deficit, was a step in this direction.
According to PAL, the Securities and Exchange Commission approved the reduction of its authorized capital by a third to P13 billion.
It said this would “eliminate the deficit which accumulated due to the company’s losses prior to its recent three-year period of profitability.”
A clean balance sheet will help facilitate the entry of an investor group, which could acquire under 40 percent of PAL Holdings.
The added financial muscle and international network of a foreign partner will help PAL realize its goal of becoming a five-star carrier.
It is currently ranked a three-star carrier by Skytrax.