MANILA, Philippines – PAL Holdings Inc., the parent firm of national flag carrier Philippine Airlines Inc. (PAL), has called off its scheduled annual stockholders’ meeting scheduled next month as the buyout talks between taipan Lucio Tan and diversified conglomerate San Miguel Corp. (SMC) continues to drag.
PAL Holdings assistant corporate secretary Ma. Cecilia Pesayco said in a disclosure to the Philippine Stock Exchange (PSE) that the company’s Board of Directors approved the deferment of the 2014 Annual Stockholders’ Meeting scheduled on the last working day of September.
“In light of the ongoing discussions between the San Miguel Corp. Group and the Lucio Tan Group with respect to their indirect equity stakes in PAL Holdings, PAL, and
Air Philippines Corporation,” Pesayco said.
She added that both parties have agreed to postpone the Annual Stockholders’ Meeting, which under the By-Laws, should be held on the last working day of September.
The Tan Group wants to take back full control of PAL by buying back the 49 percent stake of SMC in PAL.
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SMC president and chief operating officer Ramon S. Ang earlier confirmed that the Tan Group had already made a formal offer to buy back the conglomerate’s stake in PAL.
However, Ang clarified that negotiations are still ongoing but he is hopeful that talks would be completed within the third quarter of the year.
“Yes, still in talks,” Ang said in a text message.
Ang is president and COO of PAL while Tan serves as chairman of the airline.
In April 2012, SMC’s wholly-owned subsidiary San Miguel Equity Investments Inc. (SMEII) acquired a 49 percent equity interest in Trustmark Holdings Corp. for $500 million. Trustmark owns 97.71 percent of PAL Holdings, which in turn, owns 84.67 percent of PAL through PR Holdings Inc.
Since then PAL embarked on a massive refleeting program to acquire 100 brand new aircraft.
A source said negotiations regarding the buy back of SMC’s 49 percent interest is expected to be completed in the next few weeks paving the way for the return of the management control of PAL back to the Tan Group as early as Aug. 27.
The source said talks between the Tan Group and SMC has been narrowed to the value of the buyout as well as the terms of payment.
The Tan Group is reportedly raising close to $1 billion to buy back the 51 percent of SMC and to pay the advances made by the diversified conglomerate to PAL for the purchase of brand new aircraft.
After it regains full control of PAL, the Tan Group is likely to take in Abu Dhabi-based Etihad Airways as partner in the national flag carrier. The foreign airline is expected to take a 40 percent stake in the national flag carrier.
PAL is back in the black as it booked a net income of P1.49 billion in the second quarter of the year, reversing a net loss of P1.08 billion in the same quarter last year as revenues jumped 47.4 percent to P27.3 billion from P18.52 billion.