Is “Kapitan” Lucio Tan losing his touch?
The 86-year old bilyonaryo remains undecided on what to do with bankrupt Philippine Airlines while the flag carriers edges closes to financial disaster.
The board of PAL Holdings, the airline’s parent, told the Philippine Stock Exchange that it “has not approved any definite option as of this date.”
Tan is the chairman, president, CEO and COO of PAL. He was rushed to the hospital in mid-April after getting infected with COVID-19 but has reportedly recovered a few weeks ago.
PAL was reacting to rumors of a Chapter 11 bankruptcy filing initially pegged before the end of May 2021.
PAL said “the remedy and dates” cited in lingering rumors of its rescue plan “are at best mere conjectures of the industry sources they claimed to have based them on.”
So far, PAL has only confirmed that it was hammering out a “financial
restructuring plan” to right-size its fleet, reduce near-term payments
of its obligations, and cut costs further.
PAL also revealed that Tan would pump in P24.25 billion in fresh funds – with roughly 50 percent or P12.02 billion sourced from borrowings from government and private financial institutions – on top of the P17.2 billion he has already injected into the company from the fourth quarter of 2019 to first quarter of 2021. PAL will also raise P6 billion from an “exit facility” as part of its restructuring plan.
PAL lost P73 billion in 2020 (roughly P100 billion total red ink since 2017) which prompted its audit firm, SGV & Co., to red flag the company for its worsening cash crisis – it has P149.55 billion worth of aircraft and engine leases, P32.57 billion in long-term loans, and P2.48 billion in ground property rent.