Philippine Airlines' parent company plans to issue more shares under a capital restructure to meet new listing requirements.
Under the new rules that came into effect at the start of the year, companies listed on the Philippines Stock Exchange (PSE) need to have a minimum of 10% of their shares publicly traded. PAL's parent company, PAL Holdings, has until June to comply with the rule or face deregistration.
PAL said earlier this year that Trustmark Holdings, a joint venture between the Lucio Tan's Tan Group and local conglomerate San Miguel, owns 98% of the shares of the company and this leaves it well short of the new requirement.
In a statement filed with the PSE, however, PAL says that its board approved a restructuring plan in February to increase its capital base from Philippine pesos (Ps) 23 billion ($566 million) to Ps 30 billion and issue up to 2.4 billion new shares to the public.
The new share issue will allow PAL to meet the new listing requirements, but will also result in a dilution of Trustmark's stake. The company will, however, continue to be the dominant shareholder in PAL.
The new capital structure still requires approval from shareholders, with a vote set to take place in mid-March.