"We have sent our demand letter stating our position," PNB president Lorenzo V. Tan said. "The next step is to demand from its guarantors payment of P254 million.
PAL is expected to declare its inability to honor the put option, which means that its creditors will have to shoulder the expense. The flag carriers’ creditors are Fortune Tobacco Corp. and Asia Brewery Corp., both part of the Lucio Tan Group of Companies.
The put option agreement provides that the country’s flag carrier shall buy the shares held by PNB as well as other government financial institutions (GFIs), namely the Government Service Insurance System (GSIS), the Land Bank of the Philippines (LBP), the Development Bank of the Philipines (DBP) and the AFP-Retirement Service Benefits Systems, in case they decide to sell.
The GFIs have all decided to take advantage of their put option, and they have also demanded payment by end June.
GSIS president and general manager Winston Garcia said the GFIs expect PAL to tap its creditors to honor the put option. "The flag carrier does not have any money," Garcia was quoted to have said.
The GFIs, including PNB, rejected the request of the Philippine Airlines (PAL) last month to postpone by five years the implementation of the agreement.
Garcia said government may be forced "to go to court" should PAL or the creditors fail to meet their obligations by July.
The GSIS alone stands to receive an estimated P750 million from the sale of its PAL shares.
Taipan Lucio Tan controls 53.79 percent of PAL while the Philippine government through its GFIs control 4.26 percent, PNB 0.46 percent and another 2.61 percent is held by PAL employees. The remaining equity is controlled by Wealth Equities, Maxell Holdings, Richmond Holdings, and other investors. – Ted Torres