PAL secures US Bankruptcy Court approval for access to $20 million funding

ABS-CBN News

Posted at Sep 13 2021 04:16 PM

MANILA - Philippine Airlines was granted by the US Bankruptcy Court of Southern District of New York access to a loan facility as part of its Chapter 11 filing, its operator PAL Holdings said Monday. 

The Bankruptcy Court authorized PAL to borrow or access the DIP (Debtor-in-possession) loan facility of up to an interim aggregate principal amount of $20 million, PAL Holdings said in a disclosure to the stock exchange.

"After a thorough review and assessment of the Motion filed, the Court granted authority to PAL to access the DIP Loan facility as reported herein," the statement said. 

"The Court recognized that the Debtor PAL requires immediate access to the DIP Loan Proceeds in order to maintain its assets, to pay employees, and to fund its operations," it added.

The flag carrier earlier filed Chapter 11 bankruptcy protection in the US. Chapter 11 does not mean the airline is shutting down but instead, it will be allowed to operate and to pay creditors over a certain period of time.

Despite the Chapter 11 filing and its ongoing restructuring, PAL said it would be "business as usual" for employees, flights, customers, suppliers and other affiliates.

In 2020, PAL Holdings reported a net loss of P73 billion due to the "extraordinary impact" of the COVID-19 pandemic on the operations of Philippine Airines.

RELATED VIDEO:

Watch more on iWantTFC