- PAL Holdings Inc. is negotiating an additional US$100 million three-year term loan from international lenders to boost its capitalization to P30 billion
- PAL Holdings is also preparing for a share swap in addition to the capital increase
PAL Holdings Inc. is negotiating an additional US$100 million three-year term loan from international lenders to boost its capitalization to P30 billion after leading its major subsidiary, Philippine Airlines Inc. (PAL), out of bankruptcy at the start of the year.
The parent company of the Philippine flag carrier made the disclosure to the Philippine Stock Exchange on February 23 in response to a request by the bourse for additional information about PAL’s Chapter 11 exit.
PAL Holdings said it is also preparing for a share swap in addition to the capital increase to P30 billion from P13.5 billion as well as a listing of its new shares it will issue in support of its capital expansion. Then it will proceed with an equity restructuring as part of its post-PAL restructuring plan upon getting the SEC’s approval.
The capital increase will involve P10.2 billion of fresh cash infusion by BuonaSorte Holdings Inc., the parent company of PAL Holdings’ controlling shareholder Trustmark Holdings, and the stock swap transaction with the new shareholders, former unsecured creditors of PAL who agreed to receive shares in exchange for their loans to PAL. Details of the share swap have not yet been finalized.
After completing the capital restructuring at the subsidiary-level, PAL Holdings now owns 79.5% of PAL, the parent said.
It said its ownership in PAL would become 100% upon approval of its application to increase its capital to P30 billion, as by then creditors holding 20% of the capital stock of PAL would have exchanged their shares for PAL Holdings shares.
