PAL’s Chapter 11 filing seen pushing through this month

MANILA, Philippines — Philippine Airlines (PAL)’s filing for Chapter 11 bankruptcy protection in the US may push through this month as negotiations with its lessors continue ahead of the filing, according to travel data and analytics company Cirium.

Cirium, in an analysis posted in FlightGlobal, said all of PAL’s lessors are now at the documentation stage ahead of the filing, with many having formed an informal working group and are working with law firms to ensure a standard or commonality of terms.

Cirium data earlier showed that some 19 lessors are exposed to PAL for around 49 aircraft.

PAL’s filing may happen this month, after the expected filing for bankruptcy protection by the end of May did not take place.

Cirium reported that the lessors it has spoken with said that PAL is eyeing to raise debtor-in-possession financing of $505 million, broken down into $250 million of debt and $255 million of convertible debt.

It said an exit financing of about $150 million is also being sought by the airline.

Cirium said PAL is aiming for a Chapter 11 filing known as a prearranged insolvency.

In a statement last month, PAL said it was considering all options available, including a comprehensive restructuring plan that would ensure its viability and continued operations.

However, the airline said that there was no definite option that has been officially approved at that time.

In a television interview last month, PAL president and COO Gilbert Santa Maria said the company has been managing liquidity and has returned some aircraft.

He said PAL has also been trying to get the forbearance of its lessors on the payment for its aircraft.

The flag carrier, however, assured that its flights and operations would not be affected in any restructuring.

PAL has yet to release its full year 2020 financial statements.

The airline posted a total comprehensive loss of P29.03 billion in the nine months ending September last year, over three times more than the P7.86 billion recorded in the same period in 2019, as a result of the travel restrictions enforced due to the COVID-19 pandemic.