The board of PAL Holdings Inc., a company owned by tycoon Lucio Tan, has approved the exchange ratio for the swap of its shares with those of Philippine Airlines, the country’s first flag carrier.
Under the valuation arrived at by independent appraiser FTI Consulting Philippines Inc., each Philippine Airlines share could be exchanged for 15.57 PAL Holdings shares.
The share swap is part of the restructuring plan for Philippine Airlines to emerge from Chapter 11 bankruptcy. Qualified creditors of the airline are those impaired creditors that own around 20.1 percent of the carrier.
By exchanging equity in Philippine Airlines for PAL Holdings stocks, creditors will have an exit mechanism since PAL Holdings shares are traded on the stock exchange. Shares of the listed holding company were last traded at P5.72 each.
Philippine Airlines in September 2021 sought bankruptcy protection from a New York court, which allowed it to reduce its debts by $2.1 billion and return to lessors 20 aircraft. Those were equivalent to around a third of its debt and a fifth of its fleet before the restructuring that was completed in December 2021.
The flag carrier has added more flights, introduced digital initiatives, and expanded its cargo operations as the impact of the COVID-19 pandemic on global travel eased.
