PAL’s Chapter 11 hit by further delay as bank backs out: sources

Philippine Airlines’ filing for US Chapter 11 bankruptcy protection has been further delayed after one of the banks providing financing for the process backed out, according to two lessors with exposure to the airline. “The airline and the shareholder specifically are… already engaged in discussions with a replacement local back to try to fast-track the replacement tranche that they need to get in,” one lessor says, adding that the process could be delayed by about a month as a result. PAL has been aiming to raise $505m of debtor-in-possession financing, provided partly by the shareholder and partly by Philippine financial institutions, including banks, sources say. One Philippine bank earmarked to provide part of the DIP financing has decided not to proceed, Cirium understands. This is not the first time that the airline’s restructuring process, on which it is being advised by Seabury Capital, has been delayed. PAL had previously guided lessors that it planned to file for Chapter 11 at the end of May, but missed that deadline. Its most recent guidance to lessors was for the end of July, but that deadline has also now been missed.<br/>