PAL HOLDINGS, Inc. said it sought Securities and Exchange Commission’s (SEC) approval of a new equity restructuring plan.
In a disclosure to the stock exchange on Wednesday, the listed operator of Philippine Airlines (PAL) said it is seeking to use its additional paid-in capital of P25.340 billion last year “to partially wipe out its deficit” in the same year, which amounts to P29.074 billion.
In its 2017 annual report filed with the SEC, PAL Holdings said it employed the same strategy in October 2007, when it wanted to erase a deficit of P253.73 million against paid-in capital.
The SEC then allowed PAL to use its additional paid-in capital of P4.03 billion, “subject to the condition that the remaining additional paid-in capital will not be used to wipe out losses that may be incurred in the future without prior approval of the Philippine SEC.”
In September last year, the airline also requested from the SEC to reduce its authorized capital stock and cut on the par value of each share in the company-also a move to remove PAL’s deficit.
PAL was permitted to reduce its capital stock to P13 billion from P20 billion, which lowered the par value of each share to 13 centavos from 20 centavos.
PAL’s application for equity restructuring is intended to prepare the company for the entry of a new strategic investor.
PAL President Jaime J. Bautista also said in 2017 they are looking for a strategic investor that may buy “less than 40%” of the company. But he told reporters last month they have yet to come up with a resolve in their ongoing discussions.
“The situation kasi is very volatile at this time because of the oil price.” Mr. Bautista said.
PAL’s losses slipped by 17% in the second quarter to P290.817 million, from the P349.5 million it posted in the same period last year, driven by an increase in total revenues. — Denise A. Valdez