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

FILE PHOTO: An aircraft of Philippines Airlines (PAL), the Southeast Asian nation's flag carrier, taxiing at a runway while other aircraft park besides the hangar of the Ninoy Aquino International Airport (NAIA) in Manila March 14, 2016. REUTERS/Romeo Ranoco

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 restructuring 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 percent and aims to cut $2 billion in borrowings, the company said.

The restructuring plans also includes $505 million in long-term debt equity and debt financing from the airline’s majority shareholder and $150 million 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.

In June, PAL Holdings said it was in the final stages of putting together a debt restructuring plan for the flag carrier to help through the crisis.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.