Philippine Airlines gets $505 million financing under Chapter 11
Philippine Airlines (PAL) got the approval from the US Bankruptcy Court to access debtor-in-possession (DIP) financing totaling $505 million. The financing will allow the airline to operate while it restructures $2 billion debt under Chapter 11 process in the United States.
“With approval to fully access our DIP financing, PAL has the additional liquidity needed to meet our current and future obligations and to continue operating as usual,” said Nilo Thaddeus P. Rodriguez, PAL Chief Financial Officer. “We're grateful that the Court approved our motions and noted that it was a most efficient Chapter 11 hearing for a case of this complexity.”
In addition to DIP financing approval, US Bankruptcy Court gave a final nod for various restructuring agreements with shareholders, the critical part towards Chapter 11 restructuring plan approval.
Philippine Airlines filed for bankruptcy protection in New York, the United States to undergo financial restructuring under Chapter 11 process on September 4, 2021.
“Chapter 11 enables us to restructure contracts that are mostly governed by foreign laws, with our largest creditors based outside the Philippines,” Rodriquez said at the time. “We are thus able to ensure the execution of all such agreements under a well-established legal process that is universally accepted and can be completed expeditiously.”
In the first half of 2021, Philippine Airlines reported a net loss of 16.6 billion pesos ($327 million). In 2020, the airlineL posted a net loss of 20 billion pesos ($394 million).
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