MANILA - Tobacco and airline magnate Lucio Tan is in talks with foreign companies interested to acquire 51-percent stake in flagship carrier Philippine Airlines (PAL).
The majority stake in Asia’s oldest airline is still on the selling block, Tan said on the sidelines of the annual reception for the banking community hosted by the Bangko Sentral ng Pilipinas.
“Foreign parties. Local wala,” Tan said when asked about the profile of companies interested in PAL. Tan, one of the richest men in the country based on the Forbes list, is also involved in tobacco, banking, property, and liquor enterprises.
Diversified conglomerate San Miguel Corp. (SMC) owns 49 percent of PAL and is in charge of the carrier’s management, while Tan controls the remaining 51 percent.
Early this month, SMC president and chief operating officer Ramon S. Ang said the conglomerate is unlikely to boost its stake in PAL.
“The investment of SMC in PAL is 49 percent. I don’t think we will increase anything,” Ang said.
“SMC will only stick to that 49-percent investment,” Ang said.
In April 2012, SMC’s wholly-owned subsidiary San Miguel Equity Investments Inc. acquired a 49-percent equity interest in Trustmark Holdings Corp. for $500 million. Trustmark owns 97.71 percent of the airline’s parent firm PAL Holdings Inc., which in turn owns 84.67 percent of PAL through PR Holdings Inc.
Since the entry of SMC, PAL has embarked on a massive re-fleeting program aimed at acquiring 100 new aircraft to replace its existing fleet. It expects to save as much as $400 million from fuel and maintenance costs per year as part of its re-fleeting program.
It has entered into a $9.5-billion contract with EADS Group for the delivery of 65 aircraft. PAL also signed a $7-billion deal to buy 45 A321 and 10 A330-300 last August while it exercised an option to purchase 10 more A330-300 worth $2.5 billion in September.
To help PAL return to profitability this year, PAL is banking on the ongoing re-fleeting program involving the acquisition of fuel efficient aircraft as well as the lifting of the ban on local airlines to fly to Europe.
As of last year, PAL had a fleet of 48 aircraft composed of five Boeing 777-300ER, five Boeing 747-400, six A340-300, eight A330-300, 18 A320-200, four A319-100 and two A321-200 while budget carrier PAL Express has a fleet of 14 A320, four Bombardier Q300 and four Q400.