Lucio Tan in talks to sell 51% stake in Philippine Airlines

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Philippine tycoon Lucio Tan is in talks with potential investors regarding the sale of his majority stake in flag carrier Philippine Airlines (PAL).

"We received an advise today that the group of Lucio Tan was approached by investors interested to acquire its 51% stake in PAL Holdings and PAL," the carrier said in a disclosure on the Philippine Stock Exchange.

"The Lucio Tan group is seriously looking into the proposal," it adds.

Earlier, there had been speculation that Philippine conglomerate San Miguel was the unnamed investor looking to purchase the 51% stake. This comes after San Miguel invested $500 million in PAL's holding companies and its low-cost partner Air Philippines, effectively giving it a 49% stake in the carriers, last year.

San Miguel, however, issued a statement on the stock exchange on 10 June, clarifying that "the company is not acquiring the 51% majority interest of the LT Group in PAL and PAL Holdings".

Last year, San Miguel said that it expects to turn PAL around and return it to profitability within two years. The airline also has plans to order at least 100 aircraft over the next five years and retire many of its older and uneconomical widebodies, to allow it to compete effectively on long-haul routes.

Over the last few years, the flag carrier has struggled to cope with the emergence of budget carrier Cebu Pacific, which now has the largest market share in the Philippines.