Philippine Airlines (PAL) is better positioned for long-term growth with over $2- billion reduced debt and $505- million additional liquidity following the completion of its financial restructuring.
In a statement over the weekend, PAL said it has emerged from its voluntary Chapter 11 proceedings within four months, in contrast to other airlines that remain in the Chapter 11 process more than a year after filing in 2020.
PAL’s Plan of Reorganization, which was approved by the US restructuring court on Dec. 17, 2021, provides for over $2 billion in permanent balance sheet reductions from existing creditors, improvements in PAL’s critical operational agreements and additional liquidity including a $505 million investment in long-term equity and debt financing from PAL’s majority shareholder.
Under the newly effective recovery plan, PAL has the option to obtain up to $150 million in additional financing from new investors.
The airline said its consensual restructuring plan was accepted by 100 percent of the votes cast by its primary aircraft lessors and lenders, original equipment manufacturers and maintenance, repair and overhaul service providers, and certain funded debt lenders.
“Philippine Airlines stands ready to help grow back the Philippines’ local and international air travel markets in ways that renew the tourism industry, serve the needs of global citizens including overseas Filipinos, and contribute actively to the recovery of the Philippine economy,” said Lucio Tan III, PAL director, quoting his grandfather and PAL chairman and chief executive officer Lucio Tan.
Moving forward, PAL said it will reinvest in its operations to better serve its customers by reinforcing its position as the Philippines’ sole full-service airline with the largest international network serving four continents, restoring more routes and increasing flight frequencies as travel restrictions ease and borders reopen, and building on code sharing and interline partnerships to complement the airline’s current and future network.
