Manila Bulletin
Friday, December 4, 1998
Philippine Airlines (PAL) is set to submit its new rehabilitation plan before the securities and Exchange Commission (SEC), pursuing a stand-alone tack with all the required $150 million financial requirement to put the flag carrier into a better financial footing.
PAL said yesterday that the stand-alone option, which is one of the two routes drawn up by PAL’s financial advisors, does not include infusion by the national government through the government financial institution (GIFs) with existing exposures in the airline firm.
Meanwhile, President Joseph Estrada said yesterday he was still hopeful Cathay Pacific Airways Ltd. would resume negotiations to acquire part of Philippine Airlines (PAL), whose fate hung in the balance after the Hong Kong carrier pulled out of talks.
“Cathay management wrote me that they are still available for another (round of) negotiations so let us not lose home,” said Estrada, who has taken personal interest in the survival of PAL, Asia’s oldest airline.
“I’m not giving up because the management of Cathay wrote a letter and said they’re willing to renegotiate again,” Estrada said.
On the other hand, PAL said it would pursue its rehabilitation program even without the participation of a strategic partner, as it vowed to maintain operations and serve the riding public in the wake of Cathay Pacific’s retreat from a possible investment in the flag carrier.
“We have stand-alone plan that we will submit to the SEC on December 7. It does not provide for a foreign airline partner but if there is one in the future, that will be an enhancement,” said Manalo E. Aquino, PAL Executive Vice President.
Despite the withdrawal of Cathay Pacific, PAL said a number of reputable and established local groups had indicated interest in acquiring a stake in PAL.
The plan, according to Aquino, includes the retention of 22 aircraft and the restructuring of outstanding obligations.
According to industry sources, PAL is still pursuing plans to have a foreign partner in the future.
PAL’s negotiations with Cathay Pacific Airways Limited turned sour due to disagreements on management control and evaluation.
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