Philippine Airlines Approved to Exit Bankruptcy, Cut Debt Load

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Philippine Airlines Inc. won court approval for its reorganisation plan, paving the way for the carrier to exit bankruptcy, cut $2 billion in debt and revive its fortunes after a slump in international travel due to the pandemic, Bloomberg News reported. Bankruptcy Judge Shelley Chapman in Manhattan said on Friday that she would approve the chapter 11 plan after unsecured creditors voted to back the proposal. The reorganization didn’t face any major opposition from debt holders. "This case is a model for what can be accomplished in chapter 11,” Chapman said. "You’ve achieved overwhelming consensus.” The company will try implement the plan and exit bankruptcy by the end of the year, if it is able to get approval from securities regulators in the Philippines, a lawyer for the airline said during the court hearing on Friday. The flagship carrier, majority owned by billionaire Lucio Tan, is one of several to enter debt restructuring in the U.S., which companies often consider a preferred location. Aeromexico and Colombia’s Avianca Holdings sought court protection in New York last year. Philippine Airlines already got a green light to access $505 million worth of equity and debt financing to help it meet its obligations. As part of the turnaround, it plans to reduce the size of its fleet. Read more.