MANILA - The Philippines' second richest man will regain full control of Philippine Airlines by buying back a 49-percent stake from San Miguel, the firms said Tuesday, in a deal reportedly worth $1 billion.
Lucio Tan is to take back the stake he sold to San Miguel two years ago, according to disclosure statements filed with the stock exchange that did not disclose the price.
"The two biggest stockholders of Philippine Airlines... signed a joint agreement whereby (San Miguel Corp.) expressed willingness to sell its 49 percent stake to the group of Dr. Lucio Tan," a San Miguel statement said.
PAL Holdings, the airline's holding company, issued a similar statement.
Spokeswomen of the two companies declined to give the amount of the planned deal.
San Miguel paid $500 million when it bought the stake from the LT Group, a holding firm controlled by Tan who is listed by Forbes magazine as the second richest man in the Philippines with a net worth of $6.1 billion.
The 2012 deal saw San Miguel take management control of the flag-carrier even though Tan remained in control of the majority 51 percent shareholding.
San Miguel then invested more to help pay for a major modernisation of PAL's fleet, which included a 2012 order for 54 Airbus with a list price of $7 billion. Since then, the airline has also been removed from European and US aviation safety blacklists.
San Miguel President Ramon Ang, listed by Forbes as the 32nd richest man in the Philippines, has overseen the diversification of the firm from its base in the beer, food and beverage industries into infrastructure, power and airlines.
However San Miguel's investment in PAL soured as two of the nation's most powerful men decided they did not want to share control, according to Alex Tiu, a stock market analyst with AB Capital Securities.
"What insiders are saying is that this is more of a pride issue. It was either going to be full control to Ramon Ang or full control to the Lucio Tan group," Tiu told AFP.
Media reports that Tan paid San Miguel $1 billion for the stake sounded credible, Tiu added.
But Tan, who also has interests in tobacco, banking and beer-making, may also profit from full control of PAL, according to Tiu.
The airline returned to profit this year under San Miguel's stewardship.
PAL Holdings posted a net income of 1.49 billion pesos ($34 million) in the second quarter of this year from a loss of 1.08 billion pesos in the same period last year, the company's records showed.
PAL is also expected to benefit from the Philippines' recovering economy, the government's new tourism thrust and the airline's removal from the safety blacklists, Tiu said.
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