PAL Holdings Inc. said it will undergo equity restructuring to partially erase its deficit in preparation for the entry of a new strategic investor.
The parent firm of Philippine Airlines informed the stock exchange it filed with the Securities and Exchange Commission a request for equity restructuring specifically to use its additional paid-in capital of P25.33 billion as of December 2017 to partially wipe out a deficit of P29.07 billion.
PAL earlier said it was confident of closing a deal with a new strategic investor this year and was expecting to sell up to 40 percent to the new investor.
The airline, now wholly-owned by tycoon Lucio Tan after buying back a 49-percent stake that San Miguel Corp. purchased from him in 2012, reported a total comprehensive loss of P444.78 million in the January-to-June period, up 59 percent from P279.79 million year-on-year.
The company also booked a comprehensive loss of P243.11 million in the second quarter of the year from a net profit of P254.28 million a year ago.
The country’s flag carrier posted total revenues of P75.13 billion in the first half of the year, up 13.3 percent from P66.31 billion on the year.
PAL Holding ’s total expenses rose 15 percent to P75.57 billion from the previous year’s same period of P65.61 billion primarily due to the increase in flights mounted.
The company attributed the increase in expenses mainly to higher-flying operations, aircraft and traffic servicing, reservations and sales and passenger service expenses.
PAL Holdings said the 22-percent increase in flying operations over last year’s same period total of P33.70 billion was mainly due to the surge in fuel cost.
PAL’s fuel expenses increased 27 percent as a result of the escalation in average price per barrel of aviation fuel from $74.99 in 2017 to $91.08 in 2018.