Telecom czar Manuel V. Pangilinan, or MVP, has started the search for the top executive who will steer Philippine Airlines, his next acquisition target. The grapevine said he had narrowed his options to individual chief executive officers presently running the operations of companies under the fold of the PLDT/Smart/Metro Pacific group.
Thus, the candidates for the plum PAL job include Jose Ma. Lim of Metro Pacific Investments Corp., Napoleon Nazareno of Philippine Long Distance Telephone Co. and Smart Communications Inc., Ricky Vargas of Maynilad Water Services Inc. and Ramoncito Fernandez of Metro Pacific Tollways Corp.
The grapevine said Ricky Vargas had the slight edge over the other candidates for the PAL position. A former Cabinet member, meanwhile, will likely fill up the vacancy in Maynilad Water, assuming the negotiations to acquire PAL from tycoon Lucio Tan push through.
The ex-Cabinet member is coming back to the private sector after serving a controversial post in the government. MVP himself is lining him up for a juicy position in the PLDT/Smart/Metro Pacific group. Moreover, MVP can defer to him in matters concerning aviation, where he had a successful career before joining the bureaucracy.
San Miguel’s challenge
The negotiations between MVP and Lucio Tan may still fall through. Ramon Ang, president and chief operating officer of San Miguel Corp., himself said he was giving advice to the airline tycoon to solve its financial and labor troubles. The grapevine said it would not be far-fetched if San Miguel, Ang or his own personal group decided to make a rival bid for the airline.
MVP, though, is bent on purchasing Asia’s oldest airline. A close associate of MVP said Hong Kong-based First Pacific Co. Ltd. had “agreed in principle” to acquire the flag carrier and was just waiting for a resolution of the airline’s labor dispute before finalizing the transaction.
The labor row stemmed from PAL management’s decision to outsource most of its workforce requirements. At least 2,600 workers will be affected by the arrangement.
MVP’s overtures were supported by the formation of a new aviation company last month. PLDT, Metro Pacific Investments created Pacific Global One Aviation Inc. with an initial capital of P400 million. Other incorporators of Pacific Global One are Meralco Powergen Corp. and Metro Pacific Tollways, both affiliated with MVP.
Windfall from PAL
PAL is readying a check of P2.5 billion this weekend to pay for the separation and other benefits of about 2,400 workers who will lose their jobs due to the company’s outsourcing program. PAL secured the funds after signing a $50-million loan agreement with Credit Suisse AG.
The airline has assured workers from the catering, ground handling and call center reservations units they can get their payment in full as promised.
Workers covered by the spinoff will receive P50,000 in gratuity pay upon receipt of termination letters and another P50,000 after signing up with service providers.
President Benigno Aquino III, meanwhile, has acknowledged the strategic importance of PAL’s operations. The President cited national interest and the growing unrest in the Middle East, where millions of Filipinos work.
The Philippines, he says, needs at least two long haul planes to fetch Filipinos wishing to leave the troubled region.
“We cannot allow our national flag carrier and all the other carriers capable of reaching those destinations to become non-entities and lose that ability, if there is a need to repatriate our countrymen,” says Aquino.
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