PAL exits Chapter 11 bankruptcy process, pushes recovery plan
In a statement, PAL announced it has emerged from its voluntary Chapter 11 bankruptcy proceedings which allowed itto reorganize its debts while staying in operation.
Under its arrangements with creditors, the flag carrier will secure some $505 million for its recovery plan upon its exit from the process — the first tranche will be a $250-million facility debt to be pared down in the next five years, and the second tranche worth $255 million will be converted into equity.
“Philippine Airlines has officially emerged from the Chapter 11 process with a streamlined fleet, a strengthened balance sheet, a US$2 billion reduction in debt and additional capital that enables us to invest in our operations,” the airline said in a statement.
“We are grateful to achieve this with the strong support of our creditors, the enduring commitment of our shareholders, the cooperation of our industry partners and government, and the collective efforts of the outstanding members of the PAL team around the world,” it added.
The airline said it successfully completed its financial restructuring within four months, in contrast to other airlines that remain in the Chapter 11 process more than a year after filing in 2020.
The flag carrier thanked its creditors and shareholders for the strong support as well as the cooperation of its industry partners and the collective efforts of PAL employees around the world who sustained flights on multiple international and domestic routes throughout the restructuring period.
PAL said it has streamlined operations with a reorganized fleet and is now better capitalized for future growth.