Philippine Airlines (PAL) is meeting creditors to restructure about $1 billion of debt following its eleventh-hour success in securing a $200 million cash injection to stay alive.
Meetings are being held with European export credit agencies (ECAs) - which are owed 55% of the airline's $2.2 billion debts and hold liens on more than half the carrier's 22 aircraft - and with the International Air Transport Association (IATA). The airline hopes agreement will pave the way for deals with other creditors.
The biggest creditor to have rejected PAL's rehabilitation plan, which the ECAs have accepted, is the US Exim Bank, which is owed around 15% of the carrier's debt. The bank has taken steps towards repossessing four Boeing 747-400s.
PAL chairman and majority shareholder Lucio Tan has secured the balance of a $200 million cash injection demanded by the Philippine Securities and Exchange Commission by 4 June. Tan supplied half, with $70 million coming from Hong Kong investment house Top Wealth Enterprises and $30 million from two Manila-based holding companies.
Source: Flight International
