MANILA - Philippine Airlines has received a US court approval to access $505 million in debtor-in-possession financing, it said Friday.
The financing is part of its restructuring program after it filed a Chapter 11 Bankruptcy protection in the US, the flag carrier said in a statement.
A Chapter 11 bankruptcy protection does not mean the airline is closing down but it would instead be allowed to operate and pay debts over a period of time.
“With approval to fully access our DIP financing, PAL has the additional liquidity needed to meet our current and future obligations and to continue operating as usual," PAL Chief Financial Officer Nilo Thaddeus P. Rodriguez said.
"PAL will emerge a leaner and more competitive airline thanks to our hardworking employees, the resolute commitment of our majority shareholder and the strong support from our stakeholders and creditors,” he added.
PAL said it would continue operating and that passengers and employees are unaffected by the restructuring.
“This important step confirms that our recovery process is on track as we continue to work hard on securing a fully consensual reorganization plan in an efficient manner," PAL president and COO Gilbert Santa Maria said.
PAL Holdings in 2020 reported a net loss of P73 billion due to the "extraordinary impact" of the COVID-19 pandemic on the operations of Philippine Airlines.