Aug 22 (Reuters) – San Miguel Corp said it would make a decision in the next two weeks on whether it will sell its stake in Philippine Airlines’ parent PAL Holdings Inc to business tycoon and partner Lucio Tan or buy Tan out.
Tan has said he wants to buy out San Miguel, and an exit would allow the country’s biggest conglomerate to focus more on its food interests.
San Miguel owns 49 percent of a holding company that controls around 90 percent of PAL, which has a market value of $3.2 billion. Although Tan owns 51 percent of the holding company, management control of the airline rests with San Miguel.
“In two weeks, something will happen for sure…in two weeks, we will know the outcome,” San Miguel President and Chief Operating Officer Ramon Ang told Reuters late on Thursday.
“If ever we exit, we have many existing businesses. If ever, I will concentrate more on our food business,” he said.
Local media reports have said the Tan group is unhappy with some of San Miguel’s management decisions for the airline, including the cost of an early retirement package. Representatives for both companies have declined to comment on the reports.
This year the United States’ aviation regulator upgraded the Philippines’ civil aviation status to allow its airlines to operate new direct flights to the U.S., while the European Union last year lifted a ban on Philippine Airlines, saying its safety standards had improved.
PAL Holdings, which is looking to retake market share lost to archrival Cebu Air Inc, swung to a net profit of 1.46 billion pesos ($33 million) in the April-June quarter from a 1.06 billion peso net loss a year ago.
Ang said the company has posted profits in the past four months and the trend will likely continue. (Reporting by Neil Jerome Morales; Editing by Edwina Gibbs)