The board of directors of the parent firm of Philippine Airlines (PAL) has approved an equity restructuring to remove both existing and additional deficit to be incurred after the acquisition of Zuma Holdings and Management Corp. and subsidiary Air Philippines.
In a disclosure to the Philippine Stock Exchange yesterday, PAL Holdings Inc. said the board approved to reduce the authorized capital stock to P18 billion divided into 30 billion common shares with a par value of P0.60 per share, from P30 billion divided into 30 billion common shares with a par value of P1 per share, without returning any portion of the capital to stockholders.
“The resulting reduction surplus from the foregoing transaction shall thereupon be used by the corporation, together with its existing additional paid in capital and the additional paid-in capital to be booked upon the completion of the acquisition of Zuma to wipe out its projected deficit as of April 30 (tentatively), on a consolidated basis,” PAL Holdings said.
Earlier, PAL Holdings said it will acquire Zuma for P8.24 billion through a share swap deal.
Zuma is 60 percent owned by Cosmic Holdings Corp. and 40 percent owned by Horizon Global Investments Inc.
Under the deal, PAL Holdings will issue 19 shares for each Zuma share held by Cosmic and Horizon.
The transaction with Zuma and integration of the two airlines PAL and Air Philippines, are expected to streamline processes, as well as improve the transportation experience of the riding public, reduce costs and increase revenues.
After getting the approval of the Securities and Exchange Commission (SEC) for the equity restructuring, PAL Holdings will amend its Amended Articles of Incorporation to revert its par value per share to P1.
PAL Holdings said PAL’s board of directors likewise approved a similar equity restructuring.
The resulting reduction surplus from the transaction, together with its existing additional paid in capital, will be used by PAL to wipe out its deficit as of end-2016. (L. Desiderio, PS)