C08219-2021

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)
Dec 7, 2021
2. SEC Identification Number
PW-94
3. BIR Tax Identification No.
000-707-922
4. Exact name of issuer as specified in its charter
PAL Holdings, Inc.
5. Province, country or other jurisdiction of incorporation
Philippines
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
8th Floor, PNB Financial Center, President Diosdado Macapagal Ave., CCP Complex, Pasay City Postal Code 1307
8. Issuer's telephone number, including area code
(02) 8810-2451
9. Former name or former address, if changed since last report
Not Applicable
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
Common 11,610,978,242
11. Indicate the item numbers reported herein
Item 9

The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.

PAL Holdings, Inc.PAL

PSE Disclosure Form 4-13 - Clarification of News Reports References: SRC Rule 17 (SEC Form 17-C) and
Section 4.4 of the Revised Disclosure Rules

Subject of the Disclosure

Clarification of News Reports
Source bilyonaryo.com
Subject of News Report “Drag-along, tag-along: PAL to force minority shareholders to join Lucio Tan if he decides to sell bankrupt airline”
Date of Publication Dec 6, 2021
Clarification of News Report

December 7, 2021

DISCLOSURE DEPARTMENT
THE PHILIPPINE STOCK EXCHANGE, INC.
Philippine Stock Exchange Plaza,
PSE Tower, 5th Avenue corner 28th Street,
Bonifacio Global City, Taguig City

Attention: MS. JANET A. ENCARNACION
Head, Disclosure Department
Gentlemen:

This refers to your letter dated December 7, 2021, seeking clarification of the news article entitled “Drag-along, tag-along: PAL to force minority shareholders to join Lucio Tan if he decides to sell bankrupt airline” posted in bilyonaryo.com on December 6, 2021. The article reported in part that:


“Philippine Airlines (PAL) is covering all bases in drafting its new shareholder agreement to ensure that minority shareholders would have no choice but to join bilyonaryo owner Lucio Tan if he decides to divest from the loss-making flag carrier.

Based on documents submitted to the United States Bankruptcy Court in the Southern District of New York, PAL has adopted a drag-along provision that would empower the majority owner (dragging stockholder) to compel the minority (drag-along stockholders) to jointly sell their shares to a third-party buyer.

Under the agreement ‘drag-along stockholders shall vote in favor of the transaction and take all actions to waive any dissenters, appraisal or other similar rights.’

This means that should Tan decide to accept a buyout offer for PAL, the airline’s minority stockholders led by Japan’s ANA Holdings, the parent of Japan’s largest airline All Nippon Airways (ANA), must also sell their shares if the PAL chairman and CEO invoke the drag-along provision.

Tan’s control of PAL has increased from 80 percent to 89 percent after pumping in P12.75 billion or $255 in new equity under the airline’s bailout plan. Tan is also providing a P12.5 billion or $250 million five-year loan to PAL. ANA’s stake will be diluted from 9.75 percent to 4.75 percent with the new cash for Tan.

. . . .

Please be informed that the DRAG-ALONG/TAG ALONG provision is Section VI of the draft Shareholders Agreement submitted by PAL on Dec. 4, 2021 to the Chapter 11 Court as Supplement to Proposed Chapter 11 Plan of Reorganization of Philippine Airlines. There is nothing wrong or extra ordinary about a Drag Along / Tag Along provision. The provision is intended to protect Minority Shareholders, to ensure that they benefit from the sale by the Majority Shareholders of its shares because of the Tag Along provision. It compels whoever will buy the shares of the Majority Shareholder to also consider buying likewise the shares of the Minority Shareholder. The Minority Shareholder left on their own, may not be able to negotiate better terms, or may have difficulty selling their shares. If they tag along with the Majority Shareholder, then they are ensured of getting the same terms as the Majority Shareholder.

Hope you find the forgoing in order.


Very truly yours,
PAL HOLDINGS, INC.

By:

MA. CECILIA L. PESAYCO
Corporate Secretary
Other Relevant Information

None.
Filed on behalf by:
Name Ma. Cecilia Pesayco
Designation Corporate Secretary