Philippine Airlines’ (PAL) parent firm, PAL Holdings Inc., will double its authorized capital stock from P13.5 billion to P30 billion and issue 10.2 billion shares worth P12.75 billion via a private sale.
Stockholders approved the move during their Nov. 25, 2021 annual meeting to aid the flag carrier as it undergoes Chapter 11 proceedings. PAL Holdings will issue the shares to PAL Chairman and CEO Lucio C.Tan’s Buona Sorte Holdings Inc. via a private placement.
Earlier, PAL announced Buona Sorte will also give the flag carrier a $250-million five-year term loan.
PAL will use the P12.75 billion equity infusion and the $505-million loan to restructure its finances, as a vital part of its US Chapter 11 filing.
Chapter 11 allows PAL to wipe out $2.1 billion in aircraft-related obligations, restructure its business and streamline its fleet to make operations viable.
Already, PAL Holdings slashed losses by 24 percent to P21.83 billion in the first nine months of 2021, after cutting costs.
Revenues were still down 30 percent to P32.2 billion as passenger ticket sales plunged 39 percent.
However, as travel restrictions eased in the third quarter, PAL's revenues soared 67 percent to P14.12 billion.
Losses during the quarter declined 34 percent to P5.28 billion.