SEC Task Force Seen to APrrove PAL Rehab Plan

Today

Monday, December 28, 1998

Lawrence Agcaoili

The task force commissioned by the Securities and Exchange Commission (SEC) is expected to give financially hammered Philippine Airlines Inc. (PAL) the green light to pursue its rehabilitation plan that will bring Asia's oldest airline back to its feet.

The task force composed of lawyers Manolito Soller, and Rosita Guerrero and Jesus Ulanday of the SEC Examiners and Appraisers Department met with the five-man interim rehabilitation receiver last to clear out some issues in PAL's rehabilitation plan.

The task force, activated by SEC officer-in-charge Fe Eloisa Gloria, is given until January 7 to evaluate and study the rehabilitation plan submitted on December 7.

Soller said that the task force was satisfied with the structure of the rehabilitation plan except for the company's capital infusion plans and the timetable for capital restructuring.

But he said that the rehabilitation plan was viable especially with the $150 million that will be infused by a new group of investors.

The receiver also expects to reach a compromise agreement with PAL’s creditors despite outright rejection of the submitted rehabilitation plan.

PAL chief finance officer Jaime Bautista, in an interview with reporters, said that they expected the company creditors “not to accept the plan as it will require a restructuring plan that will reduce their shareholding in the company.”

But despite the objections raised, Bautista said the company receiver is confident of the eventual approval of the rehabilitation plan.

Last week the semi-privatized Philippine National Bank said that it opposes the rehabilitation plan since it will dilute its PAL equity holdings.

Under the planned capital restructuring, PAL will reduce the par value of its existing common shares to P0.01 per share from the current P5 per share.