COCKTALES | Mayday? Mayday? Lucio Tan presses eject button in PAL venture with SMC

[Monseratto]

COCKTALES | Mayday? Mayday? Lucio Tan presses eject button in PAL venture with San Miguel - InterAksyon.com

By: Victor C. Agustin
June 10, 2013 1:16 AM

The fifty-fifty joint venture turned out to be a prelude to divorce.

Taipan Lucio Tan's year-old partnership with San Miguel Corp. has encountered severe turbulence over continued financial viability and plane rebates that the PAL chairman has had enough and finally decided to liquidate his remaining 51 percent stake, quitting the airline business for good, according to a source within the Tan camp.

The source, who spoke on condition of anonymity, was clarifying news reports over the weekend claiming that Tan had agreed to sell his remaining stake in the flag carrier to either San Miguel or to a consortium of "third-party buyers" after just over a year of allowing San Miguel to acquire 49 percent and management control of Asia's first airline.

But taipan son and LT Group president Michael Tan denied any alleged falling-out between his father and Ang, adding that the two erstwhile competitors have had "very good relations" since they sealed the partnership in April 2012.

The younger Tan said both San Miguel and the Tan group have a right of first refusal over each other's holdings in PAL and that his father finally relented -- despite Ang's optimistic projection that PAL would finally return to profitability by next year -- to let go of the still hemorrhaging airline after Ang reiterated the buyout offer last week.

According to the grapevine, news of Tan's having decided to divest entirely out of PAL came as a surprise to a number of the taipan's immediate family members. The taipan celebrated the wedding anniversary with wife Carmen only last Wednesday at the family-owned Century Park hotel, with the taipan not even giving a hint of the impending major divestment, estimated at a minimum of $500 million.

The taipan himself left for abroad, reportedly for China, for the weekend.

In the meantime, Ang himself had been heard complaining a number of times about Tan's relatives and associates who had been retired from the airline intriguing against Ang and on the ticklish issue of plane rebates.

The issue of aircraft rebates was ironically the same problem that had plagued and forced Tan to jettison a group of partners led by telecom heir Antonio Cojuangco Jr. in the mid-1990s, right after the Ramos government privatized the flag carrier.

Then, as now, PAL had embarked on an ambitious re-fleeting scheme also in the hope of turning the fortunes of the ailing airline.

Both PAL and San Miguel were crafting a statement over the weekend to be submitted to the Philippine Stock Exchange Monday morning hopefully to explain the mysteries of Tan's sudden divestment from the airline.

After the partnership was sealed between the two erstwhile fierce competitors in the beer and liquor business, a jubilant Ang told reporters that both San Miguel and Tan, who also controls Asia Brewery and Tanduay Rhum, would jointly fork out $1 billion to jumpstart a 100-plane re-fleeting plan to reestablish PAL's market dominance.

Out of the $1 billion, San Miguel would infuse $750 million in PAL and its budget subsidiary, PAL Express, including the $500 million stake purchase, while Tan would deliver the balance, Ang said.

The younger Tan said his father had finally come to accept the market reality that the airline is not a core business for the LT Group. He hastened to add, however, that the LT Group and San Miguel are still partners in the airline maintenance business and the Cebu airport privatization bid, for instance.

The partnership buyout comes at a time when PAL is preparing for a major showdown with now market leader Cebu Pacific over the key Middle East markets.

Cebu Pacific is launching its first long haul, daily service to Dubai starting on October 7. But PAL, rather than directly duke it out in Dubai with the Gokongwei airline, is instead resuming service in neighboring Saudi Arabia -- with three weekly flights to Damman, four weekly to Jeddah and six weekly to Riyadh -- starting on December 1.

And like Cebu Pacific, PAL will also offer an all-economy class Airbus A330-300 for the Saudi routes.

[ghosthunter]

I expect Lucio Tan to put up his own airlines soon.

Maybe "SAN MIG AIR"

[uls]

dati na niya dapat ibenta

sakit sa ulo ang PAL

[Altis6453]

Mahaba ang pisi ni Kapitan, pero sumuka siya ng pera sa PAL.

I don't think LT knew what he was getting into when he bought into PAL in 1995. PAL was deep in the red as it was refleeting, and then there was like a combination of labor union and Asian Financial Crisis which necessitated LT shelling out more money to keep PAL afloat.

I doubt if he'll ever get back into that line of business again.

[shadow]

tama lang yan, puro sakit ng ulo bingay sa kanya ng PAL, since nabili niya yan from govt..

eh diba kasi ang sabi before it was an accommodation for ERAP...since papasok na si ERAP and he heavily supported ERAP then siyempre yun tax cases niya isa pang factor then

[Retz]

kaya gumawa siya ng airphil express newer aircraft less problematic......

[Monseratto]

Not true...pero may ibang party kausap ni kapitan...

False alarm: San Miguel not buying out Lucio Tan in PAL

False alarm: San Miguel not buying out Lucio Tan in PAL
BY RAPPLER.COM
POSTED ON 06/10/2013 1:21 PM | UPDATED 06/10/2013 1:33 PM

MANILA, Philippines - Diversified conglomerate San Miguel Corp. is not acquiring the stake of tycoon Lucio Tan's group in legacy carrier Philippine Airlines (PAL).

In a disclosure on Monday, June 10, San Miguel doused cold water over reports during the weekend that it is buying Tan's remaining stakes in PAL.

"We advise that the Company (San Miguel) is not acquiring the 51% majority interest of the LT Group in PAL and PAL Holdings Inc., respectively," San Miguel wrote.

"We have been advised by the LT Group that the latter is in talks with a group of investors who have expressed an interest to purchase such majority interest of theLT Group in PAL and PHI," it added.

San Miguel acquired a 49% minority but controlling stake in the airline last April 2012, following financial and labor troubles that hounded Asia's first commercial airline for years. - Rappler.com

[badkuk]

Laki kasi ng overhead ng PAL, that's why they created AirPhil, mas profitable and budget carrier. Di baleng piso-piso fare, basta punung puno and eroplano. Volume ika nga.

[greenlyt]

so sino kaya kausap ng LT Group?....... SM Group?......

[niky]

Flying malls? Katapusan ng mundo...

dati na niya dapat ibenta

sakit sa ulo ang PAL

I wonder why he still bothers.

[lowslowbenz]

Here's a better Cocktales read. If you're an honest taxpayer, which I bet you are, mabubwisit ka dito.

COCKTALES | Coincidence? After PNoy calls out Fil-Chi 'tax dodgers', Lucio Tan a no-show at FCCC gig - InterAksyon.com

[Altis6453]

so sino kaya kausap ng LT Group?....... SM Group?......

Errr...nope.

The Sy's won't get into the common carrier business. Allergic sila sa mataas na CAPEX tapos ang baba ng return.

[CVT]

Didn't LT require the government to pay all of the debts of PAL before he took over? Just like what he did before he took over PNB...?

Taxpayers shouldered everything before they were privatized....: (

[vinj]

Here's a better Cocktales read. If you're an honest taxpayer, which I bet you are, mabubwisit ka dito.

COCKTALES | Coincidence? After PNoy calls out Fil-Chi 'tax dodgers', Lucio Tan a no-show at FCCC gig - InterAksyon.com

Bato-bato sa langit...