050307: Asian Spirit gets new majority owner

By Ma. Stella F. Arnaldo

Special to BusinessMirror

BUSINESSMAN Tony Ang has bought into flag carrier Asian Spirit, making him its single biggest majority shareholder, and giving rise to questions of a possible restructuring in its management. Tony Ang is brother to Felix Ang,  who owns CATS, the distributor of Mercedes Benzes in the country. Tony himself is into shipbuilding, real estate and automotive equipment, being the local distributor of Sanden car airconditioners and Michelin tires. Airline sources told BusinessMirror that Ang provided much-needed capital to the company at a time when profits were being trimmed by increased fuel costs and rising government taxes. “All owners were asked to infuse capital but no one was able to. So the airline had to look to outside sources for the capital needed,” one highly-placed source who requested anonymity revealed. Antonio V. Turalba Jr., chairman of Asian Spirit, confirmed the sale of shares to Ang by one of the Asian Spirit’s founders, Archie Po. “He [Archie] has been wanting to sell his shares for the longest time for personal reasons. I don’t want to speculate what those reasons are.” Turalba added that the Po’s shares were first offered to him and another shareholder, businessman/banker Noel Oñate, “informally,…but I guess he needed to sell [the shares] sooner, and just found a willing buyer. It would have been difficult for me and Noel to come up with that kind of investment immediately.” Turalba said he had no knowledge of how much the sale cost. Neither Po nor Ang could be reached as of press time. Separate sources in the airline said Ang already became director of the airline early this year when he purchased “new shares” issued by the cooperative, equivalent to 20 percent of total holdings, last October. Sometime in March, however, Po sold out his shares in the cooperative and the airline company equivalent to about 25 percent. This gave Ang overall shares in the company amounting to 45 percent. Airline sources said Ang is a “good friend” of Jack Po, Archie’s older brother and the airline’s executive vice president. “He invested in the airline out of friendship to Jack,” the sources said. The elder Po could not be reached for comment as well. While sources said there is a status quo for the management and its policies, analysts believe a restructuring cannot be avoided with the increase in shares of Ang. Sources explained that the airline cooperative is in the process of being dissolved because it has already outlived its usefulness. “Tax incentives for cooperatives [under the Cooperative Development Act] are only good for 10 years. There is nothing to gain in keeping the cooperative. In fact it has become an obstacle since it cannot raise funds…because no matter how much money you put into the cooperative, you are still entitled to one vote,” an airline insider said. The airline cooperative, he added, was also not owned by all the employees, only 36 of them, both in management and staff. The cooperative owned 95 percent of the airline company—20 percent of  the cooperative were each owned by Turalba, Oñate, and Po. The rest of the shares were divided among the other cooperative members. This gave rise to a very unique management structure in the airline, with Oñate as chairman of the cooperative, and Turalba, whose father, Architect Antonio Turalba Sr., once lent the cooperative the funds to help establish the airline, becoming chairman of the airline company. With the dissolution of the cooperative, and the distribution of the shares to its members, Turalba and Oñate will own 23 percent each of the airline. Analysts said if Ang does not exercise his management prerogative, the chairmanship will be a toss-up between Turalba and Oñate. Airline insiders, however, were confident that Turalba would keep his position. Asked about a possible management shakeup, Turalba said there were no indications that Ang was asking for a restructuring. “As an investor, why shake up something that’s working? It’s wise to keep it as it is. [The airline] is doing really good now, despite last year’s problems owing to the higher fuel costs and VAT [value-added tax]. I would say that his [investment] timing is impeccable.” He said the airline estimates a P1-billion profit this year, with the addition of its new international routes. Starting May 4, Asian Spirit will be flying regularly from Cebu to Koror in Palau, and soon, Zamboanga City to Sandakan in Malaysia. Chartered flights from Incheon, South Korea to Kalibo Aklan, and Davao City, are also being finalized. He added the airline’s most profitable routes are to Caticlan, and lately, to Batanes. Because of the summer season, Asian Spirit has increased its flights to Caticlan to 20 times a day. Turalba said the airline is preparing for its initial public offering as required under law, and targeting to list sometime 2008-2009.

 

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