PAL 747 wrote
Can anyone explain why San Miguel only held PAL for 2 years (2012-2014)?
There is a public story and then there is an inside story.
First, the public story
Last Sept. 15, Tan, who is chairman of PAL, took back full control of the airline after completing the
$1.3 billion to re-acquire the 49 percent interest that SMC bought in PAL in April 2012.
In April 2012, SMC’s wholly-owned subsidiary San Miguel Equity Investments Inc. (SMEII) acquired a 49 percent equity interest in Trustmark Holdings Corp. for
$500 million. Trustmark owns 97.71 percent of PAL Holdings which in turn owns 84.67 percent of PAL through PR Holdings Inc.
With SMC on board, PAL embarked on a massive fleet renewal program involving the acquisition of 100 brand new aircraft. PAL entered into its first Purchase Agreement with Airbus for firm order of 44 A320 aircraft with options for 20 A321 NEO aircraft for delivery in fiscal years 2014 to 2020. It also signed a second Purchase Agreement for a firm order of 10 A330-300 and options for another 10 for delivery in fiscal years 2014 to 2016.
However, PAL and Airbus agreed to an amendment last March wherein the number of order of A330-300 aircraft would be reduced to 15 instead of 20. It dropped an option to acquire eight A321 NEO aircraft in the first purchase agreement but agreed to acquire eight A321 NEO. The airline has until 2017 to exercise its right to purchase four A321 NEO aircraft.
As of end-June, PAL has received a total of 17 aircraft from Airbus including 10 A330 and seven A321. The fleet of the PAL Group including PAL Express stood at 85 as of end-June.
With the Tan Group back at the helm, Bautista said PAL is looking at delaying the delivery of Airbus aircraft.
“We have to discuss with Airbus. It can be deferred, but of course, that entails cost if you defer delivery,” Bautista earlier told reporters.
https://www.philstar.com/business/2014/10/16/1380557/ang-steps-down-pal-president
And lastly, the inside story, PAL offices, maintenance services, to catering, to banking, to part supplies, were taken away from LT group because they were expensive. SMC for example went to China for maintenance away from LTP. That got the ire of his children who were mad when RSA did that. RSA was in all his rights. Even if SMC was minority, they held up management control. It was the proper thing to do. PAL ended on a positive note that year.
And this is where it became interesting,
Ang said he was willing to forego a long drawnout negotiation process with Tan because it was in danger of turning hostile, with frustration on both sides running high after a year of flip-flopping decisions by PAL’s former owner.
Remember the 10 options for the A330 which got reduced to 5, the 5 would have been the acquisition of either A359 or B789 for the LHR market. That would have put the LT group to a deeper financial hole, as it entails another billion dollars. In short, LT group refused that plan, even if it was previously agreed a year before. LT group was sabotaging SMC decision.
The aggressive expansion of flag carrier Philippine Airlines (PAL) has hit an unexpected speed bump as it
puts on hold a potential multibillion-dollar order for new planes from American firm Boeing Co. due to safety issues.
This was due to recently discovered problems with the newly launched Boeing 787, which has been grounded for several weeks after battery overheating issues forced two of the so-called “Dreamliners” to make emergency landings last January.
PAL president Ramon S. Ang admitted that the 787 was one of several brand new planes the airline was planning to acquire. “We were looking at the Dreamliner and the other new Airbuses,” Ang said in a press briefing this week.
Because of the unforeseen issues, Ang said PAL would defer any decision on which new planes it would be buying.
The 787 is capable of carrying 250 to 260 passengers per flight or lower than the bigger 777’s 400-plus passenger capacity, depending on how seats are configured. The 787 is also capable of flying long-haul routes, making the plane ideal for long-distance, low-volume routes.
https://business.inquirer.net/179266/smc-lost-money-on-pal-investment
The reason cited was just a flimsy excuse but good enough justification to buy peace. As early as January 2013, RSA has decided to buy Boeing. Decision to buy Airbus A359 was made in 2014 as a compromise. Again to buy peace. SMC management decision. But that wasn't meant to be, as LT group reneged on that commitment, thus the proverbial straw that broke the camel's back.
flip-flopping decisions by PAL’s former owner.
Straight from RSA's mouth.
Making Sense
Locked
are headed.