PAL Holdings Inc., the parent of Philippine Airlines, obtained the approval of the Securities and Exchange Commission to restructure its equity in preparation for the entry of a new strategic investor.
PAL Holdings said in a disclosure Monday to the stock exchange the SEC issued a certificate of approval of equity structuring on August 23.
“With the grant of the said application, the company’s additional paid-in capital of P25,339,985,000 shall be used to partially wipe out the company’s deficit of P29,073,623,000,” PAL Holdings said.
PAL president and chief operating officer Jaime Bautista earlier said the airline was in talks with possible investors. The investor is expected to acquire up to 40 percent of the flag carrier.
PAL tapped Morgan Stanley as financial advisor to the transaction.
The airline, now wholly-owned by tycoon Lucio Tan after he bought back a 49-percent stake that San Miguel Corp. purchased from him in 2012, registered a total comprehensive loss of P444.78 million in the January-to-June period this year, up 59 percent from P279.79 million year-on-year.
The company also reported a comprehensive loss of P243.11 million in the second quarter of the year from P254.28 million on year.
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 year.
PAL Holding’s total expenses rose 15 percent to P75.57 billion from P65.61 billion a year ago primarily due to the increase in flights mounted.
The company attributed the higher expenses mainly to higher-flying operations, aircraft and traffic servicing, reservations and sales and passenger service expenses.
PAL Holdings said the increase in flying operations 21.7 percent over last year’s same period 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.