The ongoing financial problems of taipan Lucio Tan’s Philippine Airlines (PAL) could weigh on the group’s bid to build a P500-billion international airport in Sangley Point, Cavite Gov. Jonvic Remulla said.
PAL is considering a Chapter 11 petition in the United States to protect its assets from mainly foreign creditors and lessors while it finalizes an estimated $5-billion debt rehabilitation plan to weather the COVID-19 pandemic, Inquirer sources said.
The rehabilitation proceedings could be filed as early as this month in New York—a venue used by other global airlines reorganizing their businesses during the global health crisis.
This is unfolding as Tan’s MacroAsia Corp. is seeking to build the first phase of the Sangley Point International Airport (SPIA) through a venture with China Communications Construction Co. Ltd. (CCCC).
The first phase will cost an estimated P208.5 billion.
While the bidding was concluded a month before the pandemic caused strict lockdowns in the Philippines, the venture only recently submitted its final requirements to the Cavite government for evaluation.
Remulla told the Inquirer PAL’s problems were a separate internal matter of the Tan group but they were also waiting for developments here to materialize.
“If [the rehabilitation filing] does happen then we will further scrutinize their submission,” Remulla said in a text message.
“Their internals are to their discretion if they will reveal,” he added. “I have to reiterate that we will wait.”
Asked whether the local government had set a deadline, Remulla said their evaluation was ongoing.
The SPIA is a massive project that involves the reclamation of about 1,500 hectares of land on Manila Bay.
The entire project is meant to support up to 130 million passengers a year or more than four times Naia’s (Ninoy Aquino International Airport) existing design capacity. The initial phase will involve building capacity for 25 million passengers a year.
The SPIA is so huge that MacroAsia president and chief operating officer Joseph Chua said on Feb. 22 they might seek support from other companies in Tan’s business empire, which spans tobacco, liquor, banking and property.
“MacroAsia is part of a larger group so if our partners agree and the province agrees, we may bring in other parts of our group,” Chua said at the time.
The aviation sector has dramatically changed 10 months into the pandemic, affecting MacroAsia’s airline support businesses following the collapse in demand for air travel.
Its submission together with CCCC on Nov. 24, however, was a signal the venture planned to proceed with the SPIA.
Despite the pandemic, big private sector groups are still keen on expanding aviation capacity around Metro Manila and Luzon.
The Megawide Construction venture with GMR Infrastructure said they would pursue the P109-billion rehabilitation of Naia once approved by the government while San Miguel Corp. plans to build a P735-billion airport city in Bulacan province.