Suko na? PAL gives NCND response to report it’s seeking bankruptcy protection in US by end-May

Philippine Airlines is reportedly filing for Chapter 11 protection in the United States by the end of this month, according to industry watcher Cirium.

But PAL management neither confirmed nor denied the report.

READ: Vicious reality: Lucio Tan lays off 2,700 PAL workers, Sta. Maria apologizes for keeping them in the dark for months

“We’re not able to provide any details or confirmation on the type or scope of any planned restructuring at this point. Our management and stakeholders continue to work on the comprehensive restructuring and we will make the needed disclosures at the proper time once details are finalized,” said PAL in reply to Cirium.

Cirium, citing multiple sources, claimed that PAL has informed its 19 lessors (with 49 aircraft committed to PAL) that it has until the end of May to get the backing of its creditors for a debt restructuring plan.

READ: Lucio Tan losing P1B per month: Pilot-less PAL estimated to triple red ink to P12B in 2019

Cirium said PAL also wanted to renegotiate the lease terms and slim down the number of its air fleet.

With majority of its creditors in the US, PAL will seek protection under Chapter 11 of the US Bankruptcy Code which allows a company to declare bankruptcy, slash debt and revamp its business without having to close down and liquidate (Chapter 7) to pay off its debts

READ: PAL bleeding nearly P4B a month, erases P17.7B pumped in by Lucio Tan:D/E ratio balloons to 390%

Last November, Nikkei Asia reported that PAL’s post-Chapter 11 goal was to raise as much as $505 million in cash – $255 million from bilyonaryo owner Lucio Tan and $250 million from state and private financiers – and give 20 leased planes back to their owners.

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