Creditors angry at PAL chief comeback
Philippine Airlines' (PAL) newly appointed president Avelino Zapanta has sought to reassure its growing queue of disillusioned lenders, saying chairman Lucio Tan is considering putting up the entire US$200 million needed to keep the carrier afloat.
Led by the US Export-Import Bank, a number of secured creditors have sent angry letters to the Securities and Exchange Commission over the return of Mr Tan as chief executive.
Mr Tan is the majority shareholder in the ailing carrier which has more than $2.2 billion in over-due debts.
Mr Zapanta said yesterday the creditors' concerns 'have no basis in fact'.
In its letter, the Ex-Im Bank stated: 'We reiterate forcefully the reservation of [our] rights to take action to terminate the leases for the aircraft and to repossess the aircraft and seek all appropriate remedies following such termination.' But Mr Zapanta said Mr Tan was committed to turning PAL around and that on Wednesday he had fulfilled his promise to place in escrow $100 million of the minimum $200 million in new investment that PAL needs to keep operating.
Moreover, Mr Zapanta said that if no new investors could be convinced to infuse the remaining amount, Mr Tan might also shoulder the other $100 million.
Mr Zapanta was appointed the airline's president and chief operating officer in a management shake-up on Monday which also saw Mr Tan re-appoint himself as chief executive, only three months after the creditors had forced him to vacate that position after rejecting his first rescue plan.
Mr Zapanta insisted the agencies, which hold mortgages on most of PAL's aircraft, had been 'misled by disinformation'.
The Ex-Im Bank - writing for itself and on behalf of its counterpart export credit agencies in France, Germany and Britain - sent letters to the commission and to PAL's interim rehabilitation receiver on Tuesday questioning the management shake-up.
It said it was seeking 'immediate clarification' on the authority of the airline's board 'to effect changes which impact the rehabilitation process so directly and which are done outside the context of a transparent and even-handed process and thus to the detriment of PAL creditors and other stakeholders'.
The Ex-Im Bank said it was primarily concerned with the need 'to demonstrate that adequate equity would be available and a competent and experienced management team would be in place' by June 4.
Meanwhile Mr Zapanta said PAL's cash flow had reached a comfortable level.
'As far as operating margins are concerned, we're making it already,' he said.
But the president conceded PAL would unveil a loss for the financial year which ended on March 31.
