Re: Creation of APIC Using Value of an Aircraft; Non-Scheduled Domestic Air Transport as Nationalized Business Activity

March 28, 2019SEC-OGC OPINION NO. 14-19RE: CREATION OF APIC USING VALUE OF AN AIRCRAFT; NON-SCHEDULED DOMESTIC AIR TRANSPORT AS NATIONALIZED BUSINESS ACTIVITYReyes Diano Tumanda & Co. CPAs2/F Xerografix World Plus BuildingLot Space 3, Manila Ave. cor. Canal Rd.CBD, Subic Bay Freeport ZoneAttention: Peter R. TumandaManaging PartnerGentlemen :This refers to your letter dated 19 November 2018, requesting an opinion on (1) whether or not the value of an aircraft may be used to create additional paid-in capital (APIC), and (2) whether or not "non-scheduled domestic air transport" is a nationalized activity (i.e., public utility). If domestic air transport is a nationalized activity, you further inquire as to: (a) whether or not a foreign shareholder may infuse the APIC, and (b) whether or not APIC infused by a foreign shareholder should be included in the computation of foreign ownership.1. Creation of APIC using the value of an aircraftThe creation of APIC is a matter within the business judgment of the corporation. 1 It does not require the prior approval of the Commission.However, since the consideration here is...