A senior official at local conglomerate Royal Group said Wednesday the reported $1 billion buyback of Philippine Airlines (PAL) by the Philippines’ second-richest man this week would have “no effect” on Cambodia Airlines, a joint venture between the companies.
PAL on Monday announced that its minority stakeholder, San Miguel Corp., had agreed to sell back its stake in PAL to the Philippines-based Lucio Tan Group, owned by Lucio Tan.
Quoting anonymous sources, Philippines media valued the sale of San Miguel’s share in PAL at $1 billion.
San Miguel brokered the deal to launch Cambodia Airlines with Royal Group in 2013, as it had management control in PAL, meaning that Lucio Tan will now decide whether to keep the venture alive.
Representatives of Lucia Tan could not be reached for comment. However, Royal Group chief financial officer Mark Hanna said the shake-up at PAL would not have an impact on Cambodia Airlines.
“We’re still working on it. Obviously this is a new development,” Mr. Hanna said.
“It has no effect on the work we’re doing at the moment, but we will follow up,” he added. “We’d wait for the transaction by San Miguel to go through before we contacted Philippine Airlines.”
Kith Meng, the CEO of Royal Group who inked the deal with PAL, declined to comment.
Royal Group officials had expected to begin flights as early as last June, but the venture has yet to get off the ground.
Earlier this year, PAL announced that it would delay its investment in Cambodia Airlines because of the country’s ongoing political uncertainty.
In July, the Center for Asia-Pacific Aviation released a report that said the venture would most likely be abandoned.
© 2014, Joshua Wilwohl. All rights reserved.