THE operator of Philippine Airlines (PAL) on Monday said the Securities and Exchange Commission (SEC) has approved the equity restructuring plan to partially wipe out its deficit.
In a disclosure to the stock exchange on Monday, PAL Holdings, Inc. said the SEC issued a certificate of approval of its equity restructuring on Aug. 23.
PAL said the approval means the company may now use its additional paid-in capital of P25.340 billion from its 2017 financial statement to partially wipe out its deficit of P29.074 billion in the same year.
The flag carrier’s application for equity restructuring is a repeat of what it did in October 2007. At that time, the company had also sought the SEC’s approval to use its additional paid-in capital to wipe out its deficit. SEC approved PAL’s application then, allowing the company to remove a deficit of P253.73 million using its additional paid-in capital of P4.03 billion.
At that time, PAL said the regulator required the company to get approval from the SEC before using its remaining additional paid-in capital to erase any losses in the future.
In September last year, the SEC approved a similar application from PAL, again crafted to remove its deficit in its financial report. It requested to decrease its authorized capital stock and increase the par value of each of its shares.
PAL said then the removal of its deficit was part of the company’s intentions to welcome a new strategic investor that will buy “less than 40% of the company.”
PAL President Jaime J. Bautista told reporters in July discussions with prospective investors have not progressed.
The flag carrier saw its net attributable loss from January to June go up 7.19% to P1.398 billion from last year’s P1.304 billion due to higher losses in the first quarter.
Mr. Bautista told reporters in June that the company is hopeful to end the year with a “modest profit,” as it seeks to impose a fuel surcharge, having made an application at the Civil Aeronautics Board. — Denise A. Valdez