The listing of PAL: another Lucio Tan smart move

The public listing of Philippine Airlines is imminent with the recent smart moves of Lucio Tan.

In a document submitted to the Philippine Stock Exchange, a dormant mining company called Baguio Gold Holdings Corp revealed that one of its major stockholders, another company called Trustmark Holdings Corp, has been recently bought out by the group of Lucio Tan.

Tan acquired the entire outstanding capital stock of Trustmark for Ps25 million consisting of 25 millions shares at Ps1.00 each. Tan paid no premium over Trustmark’s book value.

In turn, Trustmark owns about 69% of Baguio Gold having subscribed to 275,712,545 shares. Of these, 200 million shares emanated from the recapitalization exercise approved by the Philippine Securities and Exchange Commission (SEC) on October 2, 2000.

Among those listed as new board of directors of Trustmark is long time Tan financial adviser Jaime Bautista.

By the backdoor

Given this circuitous movement of share ownerships, Lucio Tan may finally be able to list 70%-owned flag carrier Philippine Airlines on the PSE through a backdoor entry.

This process includes the issuance of new shares by Baguio Gold. Using these shares, it will then proceed to buy PAL in a stock swap offer. Being owned by the same beneficial owners, the transaction between Baguio Gold and PAL should proceed smoothly and as a early as before end of the year.

Precisely following these procedures, Baguio Gold issued new shares to acquire almost 90% of PAL in a document submitted to the PSE.


The Philippine Airlines is Asia’s oldest airline. While it has been privatized starting in 1992 in a mystery-novel type of acquisition in which Lucio Tan eventually emerged as beneficial owner, PAL never listed itself on the stock exchange.

Last month, the Philippine Finance Secretary Jose Pardo announced that Lucio Tan was willing to sell PAL if the government could find buyers.

It was also rumored locally that EVA Airways of Taiwan was buying into PAL. This was denied by PAL officials.

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