Oasis Management, founded by veteran asset manager Seth Fischer, is little known in the Philippines but has earned a prominent reputation in global finance circles for its activist investment roots.
Through its vehicle Oasis Investments II Master Fund Ltd., the firm made a series of privately negotiated purchases from early February up to May 7 with 10 creditors, including Rolls-Royce PLC, Avolon Aerospace, and CIT Group.
This allowed Oasis to acquire 1.54 billion shares at an average price of about P1.5 each—a nearly 70 percent discount to the value of PAL Holdings, whose shares are rarely traded on the Philippine Stock Exchange.
Creditors sell down at a sharp loss
This marks a significant haircut for creditors, who were issued shares in PAL Holdings as payment for debts the flag carrier owed them.
For example, Rolls-Royce sold its 318.6 million PAL Holdings shares for $6.54 million. This was below the $89 million it was claiming when the airline sought Chapter 11 bankruptcy protection in 2021.
It wasn’t an ideal outcome, but from their perspective, recovering something is better than walking away with nothing.
ANA is now PAL’s third-largest shareholder
The shares gave Oasis a 5.76-percent stake, surpassing Japan’s ANA Holdings (4.11 percent) to become PAL Holdings’ No. 2 stockholder.
ANA Holdings saw its PAL investment evaporate after making an important but ill-timed bet on the flag carrier.
It acquired a 9.5-percent stake in PAL Holdings in 2019, a year before the global pandemic, for roughly P4.5 per share or $95 million.
After PAL’s Chapter 11 reorganization and successful emergence from bankruptcy in 2022, ANA’s ownership was significantly diluted through new share issuances, a portion of which went to creditors as part of a $2- billion debt restructuring plan.
The move, backed by infusions from the Tan family, stabilized PAL’s finances and ensured continued operations for the region’s oldest airline.
Who is Oasis?
Oasis is widely recognized for its activist investment operations, which typically involve gaining an influential position in a target company to push for changes in governance and strategy aimed at boosting shareholder value.
Past airline investments include the purchase of a 5-percent stake in Hawaiian Airlines’ parent firm in 2013.
Fischer started Oasis in 2002 after a seven-year career managing Asian investments for Highbridge Capital.
He also previously served in the Israeli Defense Forces, the company’s website showed.
Oasis wants to further increase stake in PAL
In the PAL Holdings filing, Oasis revealed plans to acquire more PAL Holdings shares, but it has no plans to “propose any changes in the business or board of directors of the issuer.”
There’s room to strike deals with other shareholders, as the 10 creditors were part of a broader group of 46 suppliers-turned-stockholders who collectively hold about 20 percent of the airline’s holding company.
PAL is preparing for yet another leadership shift as it brings in global airline executive Richard Nuttall as its first foreign president during its stockholders meeting on May 29.
It appears to be a wait-and-see approach for Oasis before it leans into its activist roots and starts pushing for changes.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
