Philippine Airlines (PAL) has secured the approval of the Securities and Exchange Commission (SEC) to decrease its capital stock, a move that would allow the flag carrier to attract new investors.
In a disclosure to the Philippine Stock Exchange (PSE) yesterday, PAL said the SEC approved the application to decrease the authorized capital stock from P20 billion to P13 billion through a cut in par value per share from P0.20 to P0.13.
It said the SEC also gave the green light to the application to increase par value per share from P0.13 to P1, without increasing the authorized capital stock and thereby decreasing the number of shares authorized to 13 billion shares from 100 billion shares.
PAL said earlier the reduction of the authorized capital stock is part of the company’s quasi-reorganization.
It said the move, once implemented, would eliminate the carrier’s deficit which accumulated given the company’s losses prior to its recent three-year period of profitability.
PAL is looking to complete a deal with a strategic investor this year or next year.
PAL president and chief operating officer Jaime Bautista said earlier the carrier would benefit from the entry of a strategic investor in terms of the partner’s contribution in equity, management, route development, or possible membership in an alliance.
He also said a strategic investor would make it easier for PAL to meet the goal of becoming a five-star airline by 2020.
PAL currently has a three-star rating from aviation consultancy Skytrax.
Bautista said PAL is hopeful it could get a four-star rating within the year.
In another development, PAL said in a statement yesterday it is now offering a 20 percent discount for senior citizens and persons with disability, as well as the 12 percent value-added tax exemption for domestic flights booked online.
PAL has been granting the same privileges via ticket office transactions for domestic flights.
(L. Desiderio, PS)