THE Lucio Tan Group is proceeding with the consolidation of its businesses after the Securities and Exchange Commission (SEC) approved a planned share-swap transaction with shareholders of Zuma Holdings and Management Corp.
The group, through PAL Holdings, Inc., is conducting a share-swap with stockholders of Cosmic Holdings, Inc. and Horizon Global Investments, Ltd. for stakes in Zuma Holdings, also a Tan-owned company.
Under the transaction, PAL Holdings will issue over 1.65 billion of its shares in favor of Cosmic and Horizon Global, at a ratio of 19 PAL shares for every one Zuma share surrendered.
This means that the two companies, upon execution of the swap, will no longer be shareholders of Zuma but rather of PAL Holdings.
In 2016, the Lucio Tan Group announced plans to consolidate the operations of Philippine Airlines and Air Philippines via PAL Holdings’ acquisition of Zuma in a transaction valued at P8.24 billion.
The move was intended to help PAL achieve its goal of becoming a five-star carrier from its existing three-star status while at the same time allowing it to cut expenses and increase earnings.
PAL Holdings last March announced that its board of directors had cleared an equity restructuring scheme to pare down its existing deficit and the additional deficit that would be incurred upon the acquisition of Zuma.
Last month, the SEC also gave its nod to PAL Holdings’ application to decrease its authorized capital stock from P30 billion to P13.5 billion via a decrease in par value per share from P1 to P0.45.
It also approved the company’s application to increase par value P0.45 to P1 apiece, “thereby decreasing the number of shares corresponding to the authorized and subscribed capital stock of the Corporation but without increasing the authorized capital corresponding thereto.”
In a disclosure to the Philippine Stock Exchange late Friday, PAL Holdings said it was conducting a five-day voluntary trading suspension as the said transactions will affect the movement in total stockholders’ equity.