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The US Bankruptcy Court of the Southern District of New York approved Philippine Airlines’ restructuring plan
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The approval is critical for the airline to conclude bankruptcy proceedings
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PAL said it expects to emerge from the court-supervised Chapter 11 process before end-2021
A US court approved Philippine Airlines’ (PAL) restructuring plan a key part of its bankruptcy filing, the airline said in a Dec 18 statement.
PAL said this would allow them to move forward with the Chapter 11 process that they filed on September 3 and pave the way for its recovery amid the pandemic.
The approval from the US Bankruptcy Court of the Southern District of New York “represents a critical moment in our journey to emerge as a stronger airline. We are thankful for our loyal customers, dedicated employees, and the support of our shareholders and partners and government, which has enabled us to move efficiently through the process and reach this milestone,” Gilbert F. Santa Maria, PAL president & chief operating officer, said in the statement.
“We have a few more procedural steps to take before we can complete the Chapter 11 process, after which we will focus intensely on serving the public, navigating the continuing challenges of the pandemic and economic recovery, and sustaining the links that connect our archipelago,” Santa Maria explained.
The airline said its plan was accepted by “100 percent of the votes cast, which were from PAL’s primary aircraft lessors and lenders, original equipment manufacturers and maintenance, repair, and overhaul service providers, and certain funded debt lenders.”
The reorganization plan will wipe out the airline’s debts worth $2.1 billion, reduce its fleet size by a quarter, and help it acquire additional liquidity. The last involves $505 million in long-term equity and debt financing from PAL’s majority shareholder Lucio Tan and $150 million additional debt financing from new investors.
PAL said it expects to emerge from the court-supervised Chapter 11 process before end-2021.
