Philippine Airlines said on Friday that it has filed for Chapter 11 bankruptcy in the United States which will allow the airline to restructure and reorganize its finances impacted by COVID-19 crisis.
According to the company, the proposed restructuring plan was submitted in the Southern District New York. It requires court approval. The airline can reduce its fleet by 25% and will borrow $2 billion.
According to the company, restructuring plans include $505 million long-term debt equity as well as debt financing by the majority shareholder of the airline and $150 million additional financing from investors.
The company stated that PAL Holdings, the parent company listed by PAL Express and PAL Express were not part of the Chapter 11 bankruptcy.
According to court filings, Rolls-Royce is among the biggest unsecured creditors of the company.
The company stated that the plan will not affect suppliers and trade creditors who are still in business.
PAL Holdings stated that it is in final stages of preparing a plan to restructure the debts of the flag carrier, which will help the airline get through the current crisis.
Reporting by Sabahatjahan Contractor, Bengaluru. Editing by Sandra Meller.
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Publited Sat, 4 Sep 2021 at 11:33.59 +0000