Baguio Gold needs P8 billion to take over PAL

Baguio Gold Holdings Corp., which is controlled by tobacco mogul Lucio Tan, would most likely spend P8 billion to acquire the 81.2 percent stake in the country's flag carrier Philippine Airlines, Inc. (PAL). The amount was the assessment of PAL president and chief operating officer Jaime J. Bautista citing as basis the over P10 billion book value of the company. He said Baguio Gold has already started its due diligence on the six companies that combine for the controlling stake in PAL and is expected to complete the process, including the eventual backdoor listing of the airline firm, before the end of this year. Backdoor listing is a technique used by a private company to become a public company without going through the customary initial public offering process. Bautista said Baguio Gold is considering three options to go about the acquisition process. These are share-swap; assumption of the liabilities of the selling companies; and borrowings. Of the three, the most feasible option, according to Bautista, is the assumption of the liabilities. "But of course, I can't speak for the buyer. I think they are not yet on that stage," he said. Early this month, Baguio Gold disclosed to the stock exchange its plan to acquire six companies in the Lucio Tan group that combine for the 81.2 percent stake in PAL, namely, POL Holdings Inc., Cube Factor Holdings Inc., Ascot Holdings Inc., Sierra Holdings and Equities Inc., Network Holdings and Equities Inc. and Maxell Holdings Corp. The acquisition plan has been approved by Baguio Gold's board. - GMANews.TV