Philippine Air approved to exit bankruptcy, cut debt load

Philippine Airlines won court approval for its reorganization plan, paving the way for the carrier to exit bankruptcy, cut $2b in debt and revive its fortunes after a slump in international travel. US Bankruptcy Judge Shelley Chapman said Friday that she would approve the Chapter 11 plan after unsecured creditors voted to back the proposal. The reorganization didn’t face any major opposition from debt holders. “This case is a model for what can be accomplished in Chapter 11,” Chapman said. “You’ve achieved overwhelming consensus.” The company expects to emerge from the court-supervised Chapter 11 process before the end of 2021 and after completing “a few more procedural steps,” it said in a statement on Saturday. The flagship carrier, majority owned by billionaire Lucio Tan, is one of several to enter debt restructuring in the US, which companies often consider a preferred location. Philippine Airlines had already gotten a green light to access $505m worth of equity and debt financing to help it meet obligations. The company on Saturday also said the plan provides for more than $2b in permanent balance sheet reductions from existing creditors and allows the carrier to consensually contract fleet capacity by 25%.<br/>