PAL Chapter 11 filing likely to push through

MANILA, Philippines — Flag carrier Philippine Airlines (PAL)’s filing for a Chapter 11 bankruptcy protection in the US appears good to go, according to travel data and analytics company Cirium.

In a report posted in FlightGlobal, Cirium said PAL has found a replacement for the portion of a financing it previously lost after the bank supposed to provide it pulled out.

Citing sources, Cirium said another local bank has agreed to provide the $75 million in debtor-in-possession financing.

PAL earlier said it would require funding from a major stockholder of up to P24.25 billion ($505 million), which may involve sourcing of the fund from the government and private financial institutions, estimated to be around P12.01 billion ($250 million).

The group will also be seeking an exit facility amounting to P6 billion ($125 million).

Cirium said the withdrawal of one of the banks providing in debtor-in-possession financing had prevented PAL’s Chapter 11 filing.

PAL is embarking on a financial restructuring plan to ensure the group’s business continuity. It earlier disclosed that it was considering to file a pre-negotiated court-rehabilitation in an overseas jurisdiction as part of its financial restructuring.

Cirium said PAL is now hoping to make the filing on Sept. 3, New York time.

Its parent firm  PAL Holdings Inc. reported a net loss of P16.56 billion in the first half, down  20 percent from the P20.75 billion net loss incurred in the same period last year.

Consolidated revenues plunged 51 percent to P18.04 billion on the back of the continuing impact of the COVID-19 pandemic on  passenger operations.