Billionaire Lucio Tan’s Philippine Airlines Exits Bankruptcy, Poised To Recover From Pandemic Losses

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Philippine Airlines– controlled by billionaire Lucio Tan – has fallen out of bankruptcy proceedings after a US court approved its restructuring plan to reduce debt by more than $2 billion, preventing the flag carrier from damage induced by the pandemic. Got a place to recover.

PAL, which has been making losses over the past five years, has said it expects to return to the black next year with the implementation of the restructuring plan and gradual easing of travel restrictions.

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PAL said in a statement that the airline completed its financial restructuring – which was backed by creditors as well as suppliers including Airbus – within four months after the airline filed for bankruptcy protection in New York in September. Said in one Statement on Friday. In addition to debt reduction, the company also raised $505 million in fresh equity and debt from Tan.

PAL Holdings is proposing to increase its authorized capital from 13.5 billion pesos to 30 billion pesos ($324 million) to facilitate fresh equity injections from TAN, PAL’s parent company said in a separate regulatory filing on Friday. PAL also has the option to tap $150 million in additional financing from new investors.

In addition to the airline’s recapitalization, the carrier has also streamlined its operations by cutting its fleet size by up to 25% as part of the company’s restructuring. PAL aims to further strengthen its position by reinvesting in its operations as the Philippines’ only full-service carrier with the largest international network serving four continents.

Gilbert F. Santa Maria, President and Chief Operating Officer of PAL, said in a statement, “There are enormous challenges ahead, but we look forward to tackling them as a strong Philippine Airlines, making strategic developments to continue serving our customers. is in a better position.” Statement,

Airlines were hit hardest by the pandemic over the past two years as governments around the world imposed lockdowns and restricted cross-border travel to stem the spread of COVID-19. International Air Transport Association It is estimated that airlines around the world will lose around $52 billion this year after a loss of about $138 billion last year.

Tan – who emerged as a controlling shareholder of PAL in 1995, when he was appointed chairman – acquired control of PAL in 2014 after San Miguel Corp purchased a controlling interest in the airline. With a net worth of $1.9 billion, Tan was ranked 12th in a list of the 50 richest people in the Philippines published in September. His business empire extended to tobacco, spirits, banking and property.

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