Philippine Airlines Inc. (PAL) Receives US Court Approval to Access US $ 505 Million in Debtor-Operator Financing (“DIP”)

Manila, Philippines – (COMMERCIAL THREAD) – Philippine Airlines Inc. (PAL) today announced that it has obtained final US court approval to access its debtor-in-operator (“DIP”) financing totaling $ 505 million US, a key feature of the national airline’s restructuring plan. .

“This milestone confirms that our takeover process is on track as we continue to work hard to achieve a fully consensus-based reorganization plan in an effective manner. We would like to thank our lenders, aviation partners and other creditors for their high level of support and their confidence in PAL’s future. We also appreciate the support of our valued customers as we continue to serve travelers and the Philippine economy, ”said Gilbert F. Santa Maria, President and COO of PAL.

PAL’s DIP funding amounts to US $ 505 million, including a secured first lien of US $ 250 million, a multi-draw term loan, of which US $ 20 million was drawn as a result of the approvals during of the “first day” hearing on September 9, and a second lien facility for the $ 255 million B-Tranche multiple drawdown. DIP funding could be converted (at PAL’s discretion) into long-term unsecured debt and equity – rather than repaying in cash – upon exiting Chapter 11.

“With the approval to fully access our DIP funding, PAL has the additional liquidity needed to meet our current and future obligations and to continue operating as usual. PAL will become a leaner and more competitive airline thanks to our hardworking employees, the strong commitment of our majority shareholder and the strong support of our stakeholders and creditors, ”said Nilo Thaddeus P. Rodriguez, Chief Financial Officer of PAL. “We are grateful that the Court approved our motions and noted that this was a most efficient Chapter 11 hearing for a case of this complexity.”

In addition to approving the DIP funding, the US Bankruptcy Court also approved the various Restructuring Support Agreements with stakeholders, which is the critical first step towards confirming the Consensual Chapter 11 Restructuring Plan. which is supported by virtually all major aircraft lessors and lenders, original equipment manufacturers and service, repair and overhaul service providers, and some debt-financed lenders.

The U.S. Southern District of New York Bankruptcy Court also granted other final approvals, including PAL’s petitions regarding customer programs, critical and overseas vendors, and employee compensation. These approvals will allow PAL to become a stronger and better capitalized airline.

PAL will continue to operate flights in the normal course of business in accordance with safety regulations, and the Company expects to continue to meet all of its current financial obligations throughout the Chapter 11 process to employees, customers, the government and its donors, lenders, suppliers and other creditors.

Depositing entities

Philippine Airlines Inc. is the only party included in the Chapter 11 filing; while PAL Holdings Inc., which is listed on the Philippine Stock Exchange (PSE: PHI), and Air Philippines Corporation, known as PAL Express, are not included in the Chapter 11 dossier.

Additional information

Additional resources for clients and other stakeholders, and other information on PAL’s cases, can be found by visiting the Company’s restructuring website at www.PALrecovery.com.

Court records and other documents related to the Chapter 11 process in the United States are available on a separate website administered by PAL’s claims officer, KCC, at www.kccllc.net/PAL. Information is also available by calling (866) 967-0671 (US / Canada) or (310) 751-2671 (International).

Debevoise & Plimpton LLP, Norton Rose Fulbright US LLP and Angara Abello Concepcion Regala & Cruz (ACCRA) are acting as legal advisers and Seabury Securities LLC as financial advisor and investment banker to the Company.

About Philippine Airlines

Philippine Airlines, Inc. (PAL) is the national carrier of the Philippines and the country’s only full-service airline. PAL was the first commercial airline in Asia and marked its 80e anniversary in March 2021. The young fleet of Boeing 777, Airbus A350, Airbus A330, Airbus A321 and De Havilland DHC Q400 operates from hubs in Manila, Cebu and Davao to 29 destinations in the Philippines and 32 destinations in Asia and North America, Australia, Europe and the Middle East. PAL was ranked as a 4-star global airline by Skytrax in 2018 and a major 5-star airline by the Association of Airline Passengers (APEX) in 2020, and was also named the world’s most improved airline in the 2019 global survey. Skytrax to passengers.


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