Philippine Airlines (PAL) parent company PAL Holdings Inc. will double its authorized share capital from 13.5 billion pesos to 30 billion pesos and issue 10.2 billion shares worth 12.75 billion pesos through a private sale.
Shareholders approved the move at their annual meeting on November 25, 2021 to help the national carrier as it undergoes Chapter 11 proceedings. PAL Holdings to issue the shares to PAL CEO Lucio C. Tan, Buona Sorte Holdings Inc . via a private placement.
Earlier, PAL announced that Buona Sorte would also give the national carrier a five-year, $ 250 million term loan.
PAL will use the 12.75 billion peso equity injection and $ 505 million loan to restructure its finances, as a critical part of its US Chapter 11 filing.
Chapter 11 allows PAL to write off $ 2.1 billion in aircraft liabilities, restructure its business and streamline its fleet to make its operations viable.
Already, PAL Holdings has reduced its losses by 24% to 21.83 billion pesos in the first nine months of 2021, after cutting costs.
Revenue was still down 30 percent to 32.2 billion pesos as passenger ticket sales plunged 39 percent.
However, as travel restrictions eased in the third quarter, PAL’s revenue soared 67% to 14.12 billion pesos.
Losses in the quarter fell 34 percent to 5.28 billion pesos.
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