Philippine Airlines Approved to Borrow $20M to Start Bankruptcy

Philippine Airlines Inc., the flagship carrier for the island nation, won court approval to borrow money from its controlling shareholder to start its bankruptcy case in the U.S.

• The $505 million financing package is being provided by indirect equity owner Buona Sorte Holdings and the airline’s direct parent, PAL Holdings
• An unusual clause allows the airline to convert half of the loans to unsecured debt and half to equity once Philippine Airlines exits bankruptcy, according to court papers
• U.S. Bankruptcy Judge Shelley Chapman, who is based in Manhattan, gave the company interim permission to draw $20 million from ...