MANILA, Philippines – National flag carrier Philippine Airlines (PAL), is set to complete the deal with Royal Group of Cambodia (RCG) to form Cambodia Airlines Co. Ltd. within the next two months.
Ma. Cecilia Pesayco, assistant corporate secretary of PAL’s parent firm PAL Holdings Inc., said the closing date of the completion of a joint venture with RCG’s Inter Logistics (Cambodia) Co. Ltd. (ILC) has been moved to Oct. 15.
The new closing date is three months longer than the original closing date target of July 15.
“We received today the notice from PAL informing us that the closing date for the completion of PAL’s joint venture with ILC has been moved to Oct. 15,” Pesayco told the Philippine Stock Exchange (PSE).
PAL is pumping in $10 million worth of equity for a 49 percent stake in Cambodia Airlines that is 100 percent owned by Inter Logistics (Cambodia) Co. Ltd. ILC is 100 percent owned by RGC chair Neak Oknha Kith Meng.
PAL is supposed to make a downpayment of 10 percent or $1 million of the total acquisition cost on the completion of closing conditions targeted last July 15 while the balance of $9 million would be paid upon the call of the board of Cambodia Air.
Business ( Article MRec ), pagematch: 1, sectionmatch: 1
The closing conditions include the registration of the investment of PAL in Cambodia Air as well as the procurement by Cambodia Air of all the necessary franchises, permits, and licenses to operate and maintain an airline company.
Cambodia Air should be a flag carrier entitled to traffic rights and slots under bilateral agreements between Cambodia and other countries.
PAL’s board of directors approved the investment in Cambodia Air last April 25.
PAL president and chief operating officer Ramon S. Ang went to Phnom Penh early last May to sign the joint venture agreement with Kith Ming formalizing PAL’s first international airline venture.
Cambodia Airlines would compete with Cambodia Angkor Air controlled by the Cambodian government in a partnership with Vietnam Airlines.
Ang earlier said PAL would deploy 16 to 22 aircraft worth $1.5 billion to equip the fleet of Cambodia Air of which about eight to 10 would be deployed within the first year of its operations.
The PAL chief said the joint venture in the new airline would boost PAL’s revenues by $300 million to $400 million.
Phnom Penh International Airport handled 2.08 million passengers in 2012, a growth of 13 percent year on year. Phnom Penh’s airport, as well airports in the tourist towns of Siem Reap and Sihanoukville, is operated under concession by Cambodia Airports.
The operator, which is majority-owned by French infrastructure giant Vinci Group, is spending nearly $150 million on doubling the capacity of both airports to handle 5 million passengers each a year by 2015.