The Journal
Thursday, December 17, 1998
Virgilio S. Vallecera Jr.
Finance Secretary Edgardo B. Espiritu assured European creditors of Philippine Airlines (PAL) yesterday that the Estrada administration was committed to the full rehabilitation of the airline despite initial setbacks in finding a strategic partner.
The European team, representing roughly 15 percent of PAL's $2.1-billion foreign debts, sought a meeting with Espiritu yesterday essentially to obtain a firm commitment that government will support PAL's rehabilitation plan.
As part of this firm commitment, Espiritu told the European mission of a plan to allow PAL to obtain a loan directly from the $30-billion Miyazawa Fund pending the time that its rehabilitation program is being worked out.
Sources said the European mission "came away from the meeting assured that the Estrada administration is fully behind PAL."
The team of creditors, however, was also made fully aware that more government equity infusion into PAL is out of the question as this would run counter to its privatization policy, the sources said.
The team was also informed that since direct access to the Miyazawa Fund remains only an option that has yet to be fully exploited, a two-step funding scheme was planned in which a government corporation will tap the Miyazawa Fund and then invest it into PAL, the sources said.
This will not redound to government again investing in PAL because the so-called investment will only be for the time being, the sources explained.
The proposed investment of government-owned or controlled corporations will be in the form of subscription to PAL preferred shares later convertible into common or voting shares.
As PAL regains financial health and the shares gain value, PAL would undertake a public offering in which the GOCCs will sell their shareholdings, the sources said of the government's plan.
A third option was presented by Espiritu in which the creditors will form part of the airline's management team within the legal ceilings prescribed by law.
In this manner the creditors will have firsthand knowledge that their investments are being managed properly, the sources said.
The sources also said the European team found PAL’s rehabilitation plan "professionally and objectively crafted."
The Europeans’ meeting with Espiritu was meant to demonstrate support for PAL regardless of whether the search for new equity will result in finding an appropriate strategic partner or a standalone investor, the sources said.
The European investors also told Espiritu that they will work and convince their majority counterparts also to support PAL's rehabilitation program given that government is fully behind the program, the sources said.@
No comments:
Post a Comment