PAL Still Trying to Interest Cathay

Philippine Daily Inquirer 

Wednesday, December 9, 1998

AILING Philippine Airlines is trying to revive talks with prospective investor Cathay Pacific Airways, which backed out of negotiations for a possible controlling stake in the flag carrier, a PAL official said yesterday.

If Cathay is unwilling to restart the talks, PAL will consider investment offers from other foreign airlines, PAL Executive Vice President Manolo Aquitno said.

Cathay officials were not immediately available for comment.

PAL closed for nearly two weeks on Sept. 23 following labor disputes and mounting losses worsened by Asia’s financial crisis.

It then began negotiations with Cathay, but the Hong Kong carrier announced last week it was pulling out of the talks.

Finance Secretary Edgardo Espiritu said the companies disagreed over management control of PAL and the timing of Cathay’s capital infusion into the Philippine carrier.

Cathay wanted full management control of PAL but the companies were unable to agree on how to deal with a constitutional prohibition of foreigners controlling key industries in the Philippines.

Cathay also refused to put its money into PAL until after a PAL rehabilitation plan is approved by creditors and Manila’s corporate watchdog, the Securities and Exchange Commission, Espiritu said. AP