PAL’s pandemic creditors get exit option, airline to list P17.8B worth of shares next week

Taipan Lucio Tan’s PAL Holdings received clearance to list nearly P17.8 billion in new shares next week, giving creditors the opportunity to cash out since its bankruptcy filing during the pandemic.

After years of waiting, dozens of aircraft leasing firms, engine lessors, and financial institutions will be given an option to recover losses after PAL Holdings’ Philippine Airlines successfully completed a $2-billion debt restructuring deal.

Shares to start trading next week 

The listing is targeted for Jan. 27 this year, PAL Holdings said in a stock exchange filing.

Once the shares are listed, PAL’s creditors may trade them on the stock market, although there is no guarantee they will fetch their desired price due to the relatively low liquidity at PAL Holdings.

On the other hand, the listing could encourage more trading activity due to the more diversified pool of public shareholders. 

Creditors will own nearly 20% of PAL Holdings  

The airline operator, valued in the stock market at P139 billion, rose 6.13 percent to P5.19 per share with total trades worth about P5,000.

The deal includes 5.04 billion shares issued to 46 creditors, which include CIT Group Finance, Philippine National Bank, Rolls-Royce PLC, and SMBC Aviation Capital.

This is equivalent to almost 20 percent of PAL Holdings.

These firms agreed to accept shares in PAL Holdings shares, priced at P1 each, as payment for debts owed to them by the flag carrier.

Private placement deal 

PAL will list 10.2 billion private placement shares, priced at P1.25 per share, to Tan’s Buona Sorte Holdings, which supported the carrier through capital injections during its Chapter 11 process.

“The company has complied with all applicable requirements for the listing of the private placement shares and the share-for-share swap shares. The number of PAL’s listed common shares will be accordingly adjusted on listing date,” PAL Holdings said. 

About the author
Miguel R. Camus
Miguel R. Camus

Miguel R. Camus has been a reporter covering various domestic business topics since 2009.

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