Philippine Air has said it is preparing to launch a road show across Asia, Europe and North America to drum up interest in a limited offering of shares in PAL Holdings, the airline’s parent company.In a simple ceremony this week at the Securities and Exchange Commission boardroom, SEC chair Fe Barin handed PAL president Jaime J. Bautista official documents containing the agency’s approval of PAL’s petition to move out of 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 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.”