Philippine Daily Inquirer
Sunday, December 6, 1998
AFP
President Estrada yesterday said he had not given up hope on a possible deal between flag carrier Philippine Airlines and Hong Kong-based Cathay Pacific Airways Ltd.
Mr. Estrada said he had asked for an appointment with Cathay Pacific’s president and with PAL chair and majority owner Lucio Tan in a bid to iron out issues that led to a collapse of negotiations last week.
“I believe I could have them work out a solution," the President said in his weekly radio program.
“I will do everything in my power to keep PAL operations going because (if it shuts down) we are all affected.”
Disagreement on management control and valuation issues forced Cathay Pacific to break off negotiations with PAL on Wednesday.
The Hong Kong airline had expressed interest in acquiring up to 40 percent of the ailing Philippine carrier.
Tan has agreed to keep PAL afloat temporarily despite massive losses and a $2.1-billion debt, but an absence of fresh funds from new investors would eventually force it to shut down, Mr. Estrada said.
“The problem now is that PAL might stop operations again after the collapse of negotiations, but I have talked to Tan who agreed to continue," the President said.
“I will try my best to have them reach an agreement."
Separate negotiations with Northwest Airlines of the United States had not been successful either, but a government source on Friday said PAL was negotiating for a possible alliance with Singapore Airlines (SIA).
The source, who asked not to be named, said a team from the SIA was scheduled to arrive in the country this week.
PAL has said that if it does not find a foreign partner, it would attempt to go it alone and submit a rehabilitation plan to the Securities and Exchange Commission by tomorrow.@
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