Philippine Airlines files for Chapter 11 in US after COVID-19 crisis

Philippine Airlines said on Friday that it has filed for Chapter 11 bankruptcy in the United States which will allow the airline to restructure and reorganize its finances impacted by COVID-19 crisis. The proposed restructure plan which was filed in the Southern District of New York and needs court approval will allow the airline to consensually reduce its fleet capacity by 25% and aims to cut $2b in borrowings, the company said. The restructuring plans also includes $505m in long-term debt equity and debt financing from the airline’s majority shareholder and $150m of additional debt financing from new investors, the company said. PAL Holdings the listed parent company and PAL Express are not included in the Chapter 11 bankruptcy, the company added. Rolls-Royce and Lufthansa Technik are among the largest unsecured creditors in the company, according to the court filing. Ongoing trade creditors and suppliers are expected to be unimpaired by the restructuring plan, the company said.<br/>