MANILA, Philippines - Further business cooperation between the captains of two of the country’s largest business conglomerates – Eduardo “Danding” Cojuangco Jr. and Lucio Tan – is possible after joining hands to revive the country’s flag carrier Philippine Airlines and affiliate budget carrier Air Philippines Corp.
Estelito Mendoza, legal counsel of both Cojuango and Tan, said in an interview with reporters after the stockholders’ meeting of Philippine National Bank (PNB) that further tie-ups could be expected from San Miguel and the Lucio Tan group despite competing businesses.
San Miguel and the Lucio Tan Group compete directly in the several areas of businesses.
The business empire of Lucio Tan include PAL, Asia Brewery, Tanduay Distillers, Eton Properties, Philippine National Bank, Allied Bank, MacroAsia, among others while San Miguel controls San Miguel Brewery, San Miguel Pure Foods Co., Ginebra San Miguel, San Miguel Properties, San Miguel Yamamura Packaging and recently diversified into fuel and oil, infrastructure, power and energy, mining, telecom, and banking through the acquisition of Petron, Manila Electric Co., Boracay Airport, Bank of Commerce, among others.
San Miguel and the Lucio Tan Group have engaged in several court battles one of which involved a damaged suit filed by Tan’s Asia Brewery against the diversified conglomerate who owns San Miguel Beer for unfair trade acts and practices with reference to shells and shells.
“There will be future areas of cooperation whenever they believe doing so will be good for them,” Mendoza stressed.
He pointed out that Cojuangco and Tan are “very good business people” that would pursue business cooperation amid their competing business interests.
He cited the case of the decision of San Miguel to infuse $500 million to acquire a 49 percent stake in PAL Holdings that controls PAL and Air Philippines. As such, the diversified conglomerate would have a 40 percent interest in PAL and a 49 percent stake in Air Philippines.
Trustmark Holdings Corp., a majority stakeholder of PAL’s parent firm PAL Holdings entered into investment agreements with San Miguel’s San Miguel Equity Investments Inc. (SMEII).
Under the agreement, Trustmark and Zuma Holdings and Management Corp. would issue new shares to SMEII
PAL earlier got a greenlight from Malacañang to spin off its catering, ground handling and call-center reservations units to stabilize its finances due to the lingering effects of the global financial crisis.
During an ambush interview, Lucio Tan said there is a possibility that San Miguel would further raise its existing interest in PAL and Air Philippines.
“Yes, yes” he replied when asked if there is a possibility for San Miguel to have a controlling stake in the country’s flag carrier and budget airline.
Mendoza said the business cooperation was a vote of confidence for two of the country’s richest businessmen.
“It is a matter of confidence. Both of them went into what is called a win-win situation, it is how each of them view the situation,” he added.
Earlier, San Miguel president and newly appointed PAL president Ramon Ang said the flag carrier plans to acquire up to 100 new aircraft over the next five years to augment and replace the airline’s present 37-plane fleet.
The massive refleeting effort would be funded by San Miguel’s recent infusion of $500 million and another $500 million that would come from San Miguel and the Tan group with $250 million each.