SMC takes management control of PAL Holdings
MANILA, Philippines—San Miguel Corp. took over management control of publicly listed PAL Holdings, parent company of flag carrier Philippine Airlines, on Friday following a recent $500-million buy-in deal with the group of Lucio Tan.
SMC took five out of 11 board seats, one of which was occupied by SMC president Ramon S. Ang, who was also named president and chief operating officer of PAL Holdings, replacing long-time president Jaime Bautista, a disclosure to the Philippine Stock Exchange on Friday said.
Joining Ang as SMC’s representatives on the board of PAL Holdings were Iñigo Zobel, Roberto Ongpin, Aurora Calderon and Ferdinand Constantino, all of whom were elected on Friday.
As SMC bought 49 percent of PAL Holding’s stock, it took at least 40 percent of indirect stake in PAL and budget carrier Air Philippines alongside management control.
A partial revamp of the management team was also announced Friday, with Harry Tan, the tycoon’s brother, being named treasurer. Lawyer Estelito Mendoza was named corporate secretary with Cecilia Pesayco and Irene Cipriano as the assistant corporate secretaries.
Daniel Ang Tan Chai was elected chief finance officer of PAL Holdings.
The five new SMC representatives to the board replaced the following: Bautista, Domingo Chua (former treasurer), Wilson Young, Juanita Tan Lee, Johnip Cua and Cecilia Pesayco (former corporate secretary).
Ang earlier said PAL would undertake fleet modernization costing $500 million to $1 billion following SMC’s infusion of fresh capital through the parent companies.
San Miguel is involved with the modernization of the Godofredo P. Ramos airport in Caticlan, the main gateway to Boracay Island. This is the first privatized airport terminal operations in the Philippines. SMC has also expressed interest in public biddings for the public-private partnership airport contracts for other airports.
The investment will be made by SMC through a wholly owned unit, San Miguel Equity Investments Inc. (SMEII). Under the agreement, Trustmark and Zuma Holdings and Management Corp. (Zuma)— the holding companies of PAL and Air Phil — will issue new shares to SMEII.
PAL earlier got an imprimatur from Malacañang to spin off its catering, ground handling and call-center reservations units, making it easier for the airline to attract a new investor. The spin-off plan was a measure intended to stabilize PAL’s finances due to the lingering effects of the global recession.
