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Philippine Airlines disclosure statement OK’d; plan hearing Dec. 17
By Sarah Lizee
Olympia, Wash., Nov. 12 – Philippine Airlines Inc. received approval of the disclosure statement for its Chapter 11 plan of reorganization on Friday from the U.S. Bankruptcy Court for the Southern District of New York, according to an order.
The plan confirmation hearing is scheduled for Dec. 17.
As previously reported, the restructuring plan aims to permanently reduce the balance sheet by $2 billion from existing creditors.
The company will consensually contract fleet capacity by 25% and includes $505 million in long-term equity and debt financing from the airline’s majority shareholder and $150 million of additional debt financing from new investors.
According to the disclosure statement, holders of priority non-tax claims and other secured claims will be paid in full in cash or have their claims reinstated.
Holders of general unsecured claims will receive their pro rata share of the unsecured new equity allocation.
Holders of general unsecured trade claims, employee claims and customer claims will be treated in the ordinary course of business and left unimpaired.
Holders of intercompany claims will be paid, adjusted, continued, settled, reinstated, discharged, contributed to capital or eliminated.
Holders of existing equity interests will have their interests diluted to 0.001% of the number and value of those interests as of the petition date.
A hearing on approval of the disclosure statement is scheduled for Nov. 12.
The issuer is the flag carrier of the Philippines and is based in Pasay City, the Philippines. The company filed bankruptcy on Sept. 3 under Chapter 11 case number 21-11569.
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