Philippine Airlines seeks recognition under PH laws
Philippine Airlines (PR, Manila Ninoy Aquino Int’l) is asking local courts to recognize its Chapter 11 bankruptcy protection proceedings in the United States, says airline president and chief operating officer Gilbert Santa Maria.
Speaking in a forum, he said the carrier had requested that its Chapter 11 filing be recognized under the Philippine Financial Rehabilitation and Insolvency Act of 2010 or RA 10142, even though most of its investors and creditors were based in the United States.
As previously reported, the airline filed on September 3, 2021 a voluntary request for relief under Chapter 11 of the United States Bankruptcy Code, which will allow it to restructure and reorganize its finances affected by the COVID crisis. 19. He hopes to get out of the process before the end of the year. PAL Holdings, the listed holding company of Philippine Airlines, and PAL Express (2P, Manila Ninoy Aquino Int’l), are not included in the Chapter 11 dossier. The airline lost $ 2 billion in revenue after the Pandemic travel restrictions have crippled the airline industry.
On September 17, 2021, it pledged 15 aircraft, replacement engines and frequent flyer miles as collateral for a $ 505 million debtor-in-operator (DIP) term loan facility covered by majority shareholder, Buona Sorte Holdings. Inc. The DIP facility will be paid in two installments of $ 250 million and $ 255 million to help reduce its $ 6 billion debt by $ 2.1 billion.
The airline recently received approval from the U.S. bankruptcy court to draw the first $ 20 million from the loan facility and continue to operate.
Santa Maria gave assurances that the airline would continue to provide repatriation flights while it was under bankruptcy protection. “We continue to fly vaccines, we repatriate foreign workers stranded outside the country. But the most important contribution to the economy is to connect our islands and to connect our islands to the world, ”he said.