Andrzej Jeziorski/SINGAPORE
Philippine Airlines' (PAL) critical rehabilitation plan, aimed at saving the troubled carrier from collapse, is meeting with opposition from its unsecured creditors.
The plan must be approved by the Philippine Securities and Exchange Commission (SEC) by 15 April, but Chase Manhattan International Finance has urged the body to reject it, describing it as "grossly unfair and prejudicial".
The scheme stretches the repayment of debts to Chase Manhattan - owed $9.8 million or less than 0.5% of PAL's total $2.2 billion debts - over 12 years, without interest. PAL is playing down the significance of the US bank's opposition, claiming it represents a "minority" view. The International Air Transport Association, owed $32 million, is also said to have rejected the plan, and may bar PAL from the association.
About 85% of PAL's debts are held by aircraft-secured creditors, many of whom have conditionally accepted the scheme. Japanese trading house Marubeni and a consortium of local banks led by the Philippine National Bank recently gave their assent, following earlier approval from Credit Agricole Indosuez, the European Export Credit Agencies and the US Export-Import Bank.
Acceptance of the plan is conditional on the airline receiving a $200 million capital injection by 4 June, and PAL's majority shareholder Lucio Tan has agreed to make the payment himself if an alternative source is not found.
This prospect would be regarded with suspicion by creditors and PAL's ex-Cathay Pacific management team, since Tan owns 70% of the company and remains its chairman, despite having been forced to stand down as chief executive.
Source: Flight International
