Monday, October 08, 2007 PAL eyes foreign investors
PHILIPPINE Airlines (PAL) will tap foreign institutions as potential equity investors in its parent company, now that the country's biggest carrier has moved out of rehabilitation, PAL president Jaime J. Bautista said on Friday.
"We will be embarking on a road show across Asia, Europe and North America to drum up interest in a limited offering of shares in PAL Holdings Inc., our parent company," Bautista said moments following Pal's formal exit from rehabilitation.
The move culminated a nine-year stint under regulatory supervision that transformed the once ailing flag carrier into a robust, profitable company with an ambitious agenda for the future.
In a simple ceremony at the Securities and Exchange Commission (Sec) boardroom, SEC Chair Fe Barin handed Bautista official documents containing the agency's approval of PAL's petition to move out of receivership.
The rest of the SEC members--Commissioners Ma. Juanita Cueto, Jesus Enrique Martinez, Thaddeus Venturanza and Raul Palabrica--as well as the head of Pal's rehabilitation receiver, Renato Francisco, witnessed the turnover.
That formally released PAL from the strictures of its rehabilitation plan, the document that has served as the blueprint for the airline since June 1999, a year after SEC placed the company under receivership.
The move was welcomed by Pal's creditors, who have come to terms with the flag carrier on the rescheduling of its remaining obligations.
As of August 31, 2007, PAL had $869 million in outstanding principal debt, down from $2.2 billion when it entered receivership.
Graduating from receivership will bring about a number of benefits for PAL, including lower financing costs, improved financing terms, and better access to capital markets.
It will also open up more doors for the airline, which now no longer has to deal with the stigma of being under rehabilitation.
This is expected to lead to more commercial and marketing opportunities.
Moreover, the lifting of receivership provides greater flexibility for PAL as it seeks to grow its fleet, expand services, and venture to new markets.
Bautista thanked PAL chairman and Chief Executive Officer (CEO) Lucio C. Tan, whose infusion of $200 million in fresh equity into PAL in June 1999 triggered the approval of the rehabilitation plan, saving the airline from liquidation and putting it on the road to recovery.
"Dr. Tan's bold and selfless move, taken when no one else wanted to touch PAL, was an act of faith in our ability to turn around the company. The new PAL, now among best-performing airlines in the world, is a testament to Dr. Tan's commitment," he said.
The PAL chief also acknowledged the flag carrier's various stakeholders, particularly the riding public, for standing by the airline when it mattered most: "Your strong support throughout PAL's rehabilitation lifted us from crisis and turned us into a success story."
Finally, Bautista paid tribute to PAL's 7,500-strong work force: "It was your hard work and sacrifice that enabled us to attain this remarkable achievement. We could not have done it without everyone pulling together."
