ANA Holdings, Inc.’s (ANA HD) acquisition of 9.5% shares of PAL Holdings, Inc. is expected to be closed within February 28 to March 15.
ANA HD, the parent of All Nippon Airways (ANA), Japan’s largest airline and a 5-star carrier for six consecutive years, is investing US$95 million to acquire shares from Trustmark Holdings, Inc., the majority stakeholder of PAL Holdings, which is the parent company of Philippine Airlines (PAL).
PAL Holdings, in a disclosure, said the acquisition is subject to completion of both parties’ respective internal procedures.
The shares acquisition is in line with ANA HD’s mid-term corporate strategy for 2018-2022 to expand its international group network, considered its main growth pillar, and strengthen its partnerships with foreign airlines to provide further convenience to its passengers.
PAL Holdings said the parties have engaged PNB Securities to apply for a special block sale with the Philippine Stock Exchange, and necessary reports will be filed once the transaction has been crossed with the Exchange.
The holdings company disclosed that Trustmark “is expected to use the purchase price from the sale of shares to ANA HD to continue its support for the operations and the potential expansion programs of Philippine Airlines.”
The parties have also agreed for ANA HD to nominate one director to the Board of Directors of PAL Holdings. The Philippine holdings company said it may benefit from the business knowledge and experience of the ANA HD director, who will likely be elected in the next stockholders’ meeting in May.
However, PAL Holdings said that apart from being a member of the board, “ANA HD has no rights with respect to the management team of the company and/or PAL.”
Once the transaction is completed, foreign ownership in PAL Holdings will increase from 8.77% to 18.27%. PAL Holdings said it does not expect the public float to change and upon completion of the transaction, public ownership of the company is expected to remain at the present level of 10.32%.
ANA HD president and chief executive officer Shinya Katanozaka earlier said: “Asia is a key growth market and we believe Philippine Airlines is in an excellent operational position to capitalize on both the strong uptick in air traffic growth as well as the vibrant, expanding Philippine economy.”
PAL currently operates 84 flights weekly on nine routes to Japan while ANA operates 14 flights weekly on two routes to the Philippines. The two carriers have codeshare operations on Japan-Philippine routes and on domestic routes within Japan and the Philippines, linking a total of 16 Japanese and 11 Philippine destinations.
PAL has seen its fleet and network grow to almost 100 aircraft and 80 destinations in four continents.
