MIAMI – The US Bankruptcy Court has granted Philippine Airlines (PR) permission to access US$505m in debtor-in-possession (DIP) funding.
The funding will allow the airline to continue operating while it restructures its US$2bn debt in the United States through the Chapter 11 bankruptcy protection process.
According to aerotime.aero, in addition to DIP financing approval, the US Bankruptcy Court issued final approval to numerous restructuring agreements with shareholders, which is a vital step in the approval of a Chapter 11 restructuring plan.
Philippine Airlines reported a net loss of 16.6 billion pesos (US$327m) in the first half of 2021 and incurred a financial loss of 20 billion pesos (US$394m) in 2020. On September 4, 2021, PR filed for bankruptcy protection in New York to undertake the Chapter 11 financial restructuring.
Comments from Airlline CEO
Philippine Airlines CFO Nilo Thaddeus P. Rodriguez said, “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. 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.”
Philippine Airlines, a subsidiary of PAL Holdings, Inc., and formerly known as Philippine Air Lines, is the country’s flag airline. It was founded in 1941 and is the first and oldest commercial airline in Asia operating under its original name. It is headquartered in the PNB Financial Center in Pasay.
Featured image: Philippine Airlines RP-C3507 Airbus A350-941. Photo: Michal Mendyk/Airways