The United States Bankruptcy court approved all first day motions on an interim or final basis for Philippine Airlines’ voluntary restructuring, including approving access to the first $20 million of its debtor-in-possession financing totaling $505 million.
The Wall Street Journal reported that the DIP facility will be provided by Buona Sorte Holdings.
These approvals mark an important step forward in PAL’s recovery plan, which will reduce the Company’s debt by $2.0 billion and help the company recover from the impact of the global pandemic.
“This is a significant step in our recovery plan and supports our ongoing operations to continue serving our valued customers and connecting the Philippines with the world. The combination of our substantial creditor support and the court’s approvals enables us to progress toward an expedited emergence and full recovery. As travel demand increases and restrictions ease, we continue to increase domestic and international flights, while maintaining the safety and health of our passengers and employees,” Gilbert F. Santa Maria, PAL president & chief operating officer, said.
The orders granted by the U.S. Bankruptcy Court for the Southern District of New York allow PAL to operate in the normal course ensuring that the company can continue to serve customers as a full-service airline and the flag carrier of the Philippines.
PAL will continue to operate flights in the normal course of business in accordance with safety regulations, and the Company expects to continue to meet all its current financial obligations throughout the Chapter 11 process to employees, customers, the government, and its lessors, lenders, suppliers, and other creditors.
Philippine Airlines Inc. is the only party included in the Chapter 11 filing; while PAL Holdings Inc., which is listed on the Philippine Stock Exchange (PSE: PHI), and Air Philippines Corporation, known as PAL Express, are not included in the Chapter 11 filing.
