Filipino billionaire Lucio Tan is extending Ps12.8 billion ($251 million) in “fresh and additional capital” to the parent company of beleaguered Philippine Airlines.
The funds will come by way of a private placement from Tan-owned Buona Sorta Holdings (BSHI), with the amount received in cash, says PAL Holdings in a stock exchange filing dated 14 October.
“The Ps12.75 billion private placement represents the full and final payment of BSHI’s subscription to 10.2 billion new common shares of [PAL Holdings] at a subscription price of P1.25 per share in favour of BSHI,” adds PAL Holdings.
Tan, already a majority shareholder of PAL Holdings, is one of the Philippines’ richest men, with a reported net worth of more than $2 billion.
PAL Holdings in late-September more than doubled its capital stock, stating then that the fresh capital will “be invested into … Philippine Airlines, pursuant to the court-supervised reorganisation of PAL”.
PAL filed for Chapter 11 bankruptcy in early September, as the coronavirus pandemic battered the global aviation sector.
The airline’s restructuring plan aims to provide over $2 billion in permanent balance sheet reductions from existing creditors and allows the airline to consensually contract fleet capacity by 25%. It also includes $505 million in long-term equity and debt financing from PAL’s majority shareholder and $150 million of additional debt financing from new investors, the plan states.