PAL Equity Restructuring

The Board of Directors of PAL Holdings Inc. (PSE: PAL) approved an equity restructuring to enable the company to eliminate its projected deficit upon completion of its acquisition of Zuma Holdings and Management Corp. (ZUMA). As approved, the company shall decrease its authorized capital stock via a reduction of its par value per share without returning any portion of the capital to the stockholders and without changing the number of shares corresponding to the capital.

The foregoing transaction was approved with the intention that the resulting reduction surplus shall be used by the company together with existing APIC and the additional APIC to be booked upon completion of the acquisition of ZUMA and its subsidiary, Air Philippines Corp. (APC), to fully wipe out its projected deficit. Hence, at the time it was approved last 27 March 2017, the Board resolved to reduce the company’s par value from PhP1.00 to PhP0.60 per share, or such other amount as may be necessary to fully and effectively wipe out the company’s projected deficit upon completion of the ZUMA acquisition.

Based, however, on the audited financial statements of the company and of Zuma as of 31 December 2016 (which was released last 15 April 2017), it was determined with finality that the company shall reduce its par value per share from PhP1.00 to PhP0.45. Simultaneous with its application for reduction of its par value, the company shall apply also to revert its par value per share to PhP1.00 which in turn, shall result in the reduction of the number of shares corresponding to the capital without affecting the peso values of the authorized capital and subscribed capital.

Upon completion of the foregoing, the total APIC of the Company stood at PhP25,339,985,000.00 as reflected in its Audited Financial Statements as of 31 December 2017. PAL thereafter applied with the Securities and Exchange Commission to use the said APIC to partially wipe out the company’s deficit of PhP29,073,623,000.00 as reflected in its Audited Financial Statements as of 31 December 2017. The application was thereafter granted by the SEC in a certificate dated 23 August 2018.

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