Baguio Gold takes steps to hasten PAL backdoor listing

Publicly listed Baguio Gold Holdings Corp. will be issuing about 23 billion worth of new shares to execute its share-swap agreement with majority stockholders of Philippine Airlines and complete the backdoor listing of the flag carrier.

Baguio Gold, the latest acquisition of beer and tobacco magnate Lucio Tan, informed the Philippine Stock Exchange that it will be buying 100 percent of the outstanding capital stock of eight companies holding a combined 85.09 percent stake in PAL in exchange for additional shares in the listed firm.

These companies and their respective interest in PAL are: Top Wealth Enterprises Ltd. (24.59 percent), Pol Holdings Inc. (11.31 percent, Cuba Factor Holdings Inc. (10.36 percent), Ascot Holdings Inc. (9.82 percent), Sierra Holdings & Equities Inc. (9.46 percent), Network Holdings & Equities Inc. (9.01 percent), Maxell Holdings Corp. (7.03 percent) and Richmark Holdings Corp. (3.51 percent).

These entities are all single asset companies, with their total assets consiting solely of shares of stocks in PAL, owned by the Tan group of companies.

Based on PAL’s audited financial statements, it has an adjusted net asset value of P3.525 billion as of Sept. 30, 2000. Hence, the acquisition of 85.09 percent interest in PAL through the said companies is valued at approximately P3 billion.

In late October, Tan bought out the entire capital stock of Trustmark Holdings Corp., which owns 69 percent of Baguio Gold’s outstanding capital, at its equivalent book value of only P25 million.

With Tan’s buy-in, the board of Baguio Gold was overhauled to install Tan as chairman and president, replacing Macario Te. Other new faces brought in by Tan were Mariano Tanenglian, Harry Tan and Jaime Bautista, the former chief financial officer of PAL.

Baguio Gold, the fourth publicly listed company acquired by Tan after Asia Pacific Equity Corp. (now Tanduay Holdings), Air Philippines International Corp. (formerly Forum Pacific) and Philippine National Bank, will be beefing up its capital based from P400 million to P5 billion to implement the share purchase.