Asian Spirit sold for 'around P1B'


Posted at Mar 29 2008 03:31 PM | Updated as of Mar 29 2008 11:31 PM

By Ma. Stella F. Arnaldo



JUICE king and banker Alfredo M. Yao has completed the takeover of flag carrier Asian Spirit Inc. (ASI), with the signing of a share-purchase agreement Wednesday evening with the Airline Employees’ Cooperative (AEC) and individual shareholders led by prominent businessman and CATS founder Antonio Ang, Antonio Turalba Jr. of the Active Group Inc. and investment banker Noel Oñate.


In an interview with select reporters, Yao, who is chairman of Zest-O Corp.—one of the largest fruit-juice makers in country—and also chairman of Private Business Bank, said: “It’s a done deal.”


AMY Holdings Inc., an investment company owned by Yao and his siblings, and four of its other subsidiaries, will share ownership of ASI, he explained.


Yao disclosed that he would “initially be the president” of the airline and Donald Dee will be chairman. Dee is chairman emeritus of the Philippine Chamber of Commerce and Industry and, like Yao, holds a government-appointed title as special envoy for international trade. Yao is special envoy for the development of tourism with China.


Yao was tightlipped, however, on the purchase price, but a source in his group said it was “around P1 billion,” inclusive of liabilities such as debts to suppliers and banks. The check turned over to Ang’s group was estimated at about P700 million. Informed sources added that Yao would “retain a portion of the total payment for the shares for six months in case of unforeseen liabilities, such as claims or debts.”


With the purchase of ASI now complete, Yao is expected to intensify his negotiations to buy Southeast Asian Airlines, a budget carrier set up by foreigners Iren Dornier and Nikos Gitsis, and a group of local businessmen, led by marketing guru and current president of the University of Makati, Tomas B. Lopez Jr.


Yao said his plan “is to merge Asian Spirit and Seair. It is the most logical thing to do to strengthen our domestic operations.” Asian Spirit was instrumental in opening the gateway to Boracay Island, through its flights to Caticlan. Its closest rival Seair, is the dominant player in the routes to Palawan and neighboring islands.


He added that ASI will “maintain and continue with our Macau and South Korea” chartered flights, but hinted at the possibility of expanding the carrier’s regional routes to include “Xiamen and Shanghai.”


Asian Spirit flies to 15 local and international destinations with a 10-plane fleet, six of which are company-owned, while the rest are leased.


The agreement to purchase ASI “lock, stock and barrel” was signed at about 10:30 p.m. on March 26 at the Pasay Room-B of the Makati Shangri-La Hotel, after a series of lengthy meetings and last-minute discussions over dinner at the hotel’s Shang Palace. A source from Yao’s group stressed that “it is not a hostile takeover.”


Signing the share-purchase agreement on Yao’s side were Yao himself, Dee and Roberto Atendido, president of Asian Alliance Investment Corp., and a seasoned regional investment banker. Signing on behalf of ASI’s former owners were Ang, Turalba and Oñate. Until Wednesday evening, Ang was the single biggest individual shareholder of ASI, through his shares in the airline company and the employees’ cooperative.


Informed sources said Atendido, a director in the Export-Industry Bank, and Yao’s most trusted finance man, is expected to sit on the new board of ASI, along with airline sales and marketing veteran Art Alejandrino, formerly of Corporate Air.


Capt. Antonio Buendia, incumbent president of ASI, said the signing of the sale agreement capped five months “of almost-daily negotiations, including Sundays,” with Yao’s group. Even after Wednesday’s dinner, he said, there were some issues that were still being resolved at the last minute, on certain terms and conditions of the takeover.


Before ASI’s management decided to enter into negotiations with Yao sometime in November 2007, they were entertaining discussions with various possible buyers, including Cebu Pacific of JG Summit Holdings Inc., Singapore Airlines subsidiary Tiger Airways, and Manuel V. Pangilinan, chairman of PLDT.


Meanwhile, a six-man transition committee was formed to handle the takeover of Yao’s group which officially began Thursday, with their introduction to the management committee. Members of the transition team on Yao’s side are Alejandrino, Ramon Gutierrez  and Rick Aguilar—all former executives of the defunct Corporate Air, a small luxury carrier which flew between Manila and Caticlan; while those from the present airline management will be made up of Buendia, ASI executive vice president Joaquin Po  and senior vice president Butch Rodriguez.


Yao’s group stressed that the 300 employees of the carrier will also be retained, unless they are found “redundant” or not on a par, as per performance standards, to be instituted by the new owner. “We have no intention of firing anyone, except when there will be some streamlining, or some are found redundant. In some cases, we may need to transfer personnel to departments lacking in manpower,” a source from Yao’s group said.


Buendia, likewise, added that “they [Yao’s group] know the corporate law. The employer-employee relationship would be respected, unless of course, an employee is not performing well.”


The present 10-man management team of ASI, headed by Buendia and Po, is also expected to remain in office until further notice.


Asian Spirit Inc. was set up in 1995 by Turalba, Oñate and aviation investor Archibald Po, with each contributing $1 million to set up the Airline Employees Cooperative. They then invited 36 other individuals, mostly former employees of Philippine Airlines, to become shareholders. ASI was initially capitalized at P30 million but, in 2005, the Securities and Exchange Commission approved the carrier’s increase in capital to P1 billion.


The airline secured a 25-year congressional franchise in January 2003, and under the terms of the franchise, is supposed to conduct an initial public offering this year.


Last year Archibald Po sold his shares to Antonio Ang, founder of CATS Motors, the distributor of Mercedes-Benzes in the country. He is also the local distributor of Sanden air conditioners and Michelin tires. Turalba is president of the Active Group, a company started by his parents which has become a major player in the local real-estate market. Oñate, an investment banker, became known as a key Lakas power broker. Until Wednesday evening, all three shared 20-percent ownership of ASI.