MANILA – Philippine Airlines has been granted access to a loan facility by the US Bankruptcy Court for the Southern District of New York as part of its Chapter 11 filing, its operator PAL Holdings announced Monday.
The bankruptcy court has authorized PAL to borrow or access the DIP (Debtor in Possession) loan facility in an interim aggregate principal amount of $ 20 million, PAL Holdings said in a disclosure to the exchange.
“After a careful review and assessment of the filed petition, the court granted PAL access to the DIP loan facility, as set out in this document,” the statement read.
“The Court recognized that the PAL debtor needs immediate access to the proceeds of the DIP loan in order to maintain its assets, pay its employees and finance its operations,” he added.
The national carrier previously filed for Chapter 11 bankruptcy protection in the United States. Chapter 11 does not mean that the airline is shutting down, but rather that it will be allowed to operate and pay its creditors over a period of time.
Despite the Chapter 11 filing and its ongoing restructuring, PAL said it would be “business as usual” for employees, flights, customers, suppliers and other affiliates.
In 2020, PAL Holdings reported a net loss of 73 billion pesos due to the “extraordinary impact” of the COVID-19 pandemic on Philippine Airines operations.
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