June 05, 1999
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| June 05, 1999 | atimes.com | |
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| Southeast Asia Philippine Airlines rehabilitation on firm footing TOKYO - Philippine Airlines (PAL) hopes to end its troubles with a rehabilitation plan expected to be set in motion starting June 5, a day after the deadline set by the government for business tycoon Lucio Tan to raise the $200 million in additional capital to keep the flag carrier flying. In a press conference, President Estrada said Tan has personally assured him that the $200 million has already been raised. This development, the president said, rules out the need for government financial institutions to shell out funds to complete the airline's funding requirement. In a later interview, Trade Secretary Jose Pardo explained that the Securities and Exchange Commission (SEC) will give the go signal for PAL's rehabilitation plan as soon as its interim receiver gives word that the $200 million is already available. Of the $200 million required, $100 million had already been deposited in escrow, and another $70 million had been mobilized by Tan from Hong Kong. Pardo said that Tan had already found the source for the remaining $30 million, aware that failure to do so may put the airline in deeper trouble. President Estrada has consistently declared his firm position against government bailout of any private company in distress, worried that the people's money might be wasted on losing companies that could later just declare bankruptcy. ''Lucio Tan with some Hong Kong investors are putting the entire $200 million so the funds will be supported with the bank in the Philippines and then the interim receiver will then certify to the SEC [that the money is available],'' Pardo said. Finance Secretary Edgardo Espiritu explained in an interview that raising the $30 million should not be a big problem for Tan, as he explained that all that is required by the SEC is a bank certification showing that the funds are indeed available. He said the money need not be immediately released to PAL, adding that the $200 million is supposed to be used by the airline over a period of 10 months. Pardo expressed his optimism that the infusion of additional capital to the flag carrier would further help boost the Philippines' foreign exchange reserves, with the remittance of $200 million into the local economy. (Asia Pulse/PNA) | |||||||||
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