The parent firm of Philippine Airlines said the share swap transaction with unit Zuma Holdings and Management Corp. will push through after the Philippine Competition Commission declined to take actions on the transaction.
PAL Holdings said the PCC had determined that the share-swap transaction between the company and Zuma would not result in a change of control of the acquired firm.
“As such, the PCC will not take any further action with regard to the transaction. With the foregoing, the undersigned company will proceed with the share swap transaction,” PAL Holdings said.
Earlier, the board of PAL Holdings approved the acquisition of Zuma, through a share swap between existing shareholders of Zuma and PAL Holdings under the exchange ratio of 1 Zuma share to 19 PAL Holdings shares.
In exchange for the Zuma shares, PAL will issue in favor of Cosmic and Horizon a total of 1,647,959,186 shares from out of its authorized but unissued capital stock.
The total issued and outstanding capital of Zuma is currently held by Cosmic and Horizon at 60 percent and 40 percent,respectively.
The shares are valued at P5 per share or a total issue value of P8.24 billion.
No other consideration will be paid by PAL for the Zuma shares.
Zuma owns 99.97 percent of Air Philippines Corp., or Airphil Express.
Upon approval of the transaction by the regulators, PAL Holdings will indirectly own APC or Airphil Express through Zuma as one of its subsidiaries.
The other direct subsidiary is Philippine Airlines.
“The transaction will rationalize and consolidate the airline business of the Lucio Tan Group under PAL Holdings,” PAL said.
With the integration of the two airlines under PAL, it is expected that the companies can streamline their processes thereby enhancing the transportation experience of the riding public, reducing costs and increasing revenue.
PAL Holdings earlier reported a total total comprehensive income of P2.96 billion in the first nine months of the year, lower by 54.8 percent from the previous year’s total comprehensive income of P6.55 billion.
Revenues for the period January to September amounted to P85.35 billion, 3.5 percent higher than last year’s same period figure of P82.48 billion.
The airline’s total operating expenses rose 8.9 percent to P76.21 billion.