Bankrupt Philippine Airlines (PAL) is confident local banks will not contest the $505 million rescue plan filed by its bilyonaryo owner Lucio Tan with the United States Bankruptcy Court for the Southern District of New York.

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PAL Holdings, the flag carrier’s parent, issued the statement of confidence after a Pasay City court its petition for recognition of the proceedings and decisions under the Chapter 11 protection it filed in the US.

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“While it is true that the recognition of the Chapter 11 proceedings does not affect the right of Philippine creditors to commence or continue a rehabilitation or liquidation proceedings under the financial rehabilitation rules, PAL strongly believes, and does not expect, that there will be any proceedings to be initiated by creditors because of the pre-arranged nature of the case,” said PAL.

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“It is to be noted that there had been no objection recorded from the creditors in both the US Chapter 11 and Pasay Court cases,” it added.

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PAL negotiated with its creditors and aircraft lessors for months before it formally filed for Chapter 11 bankruptcy on September 3. PAL said it has so far obtained support for its bailout plan from 90 percent of its creditors and suppliers.

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PAL owed a total of $274 million in unsecured credit to four local banks – $113.8 million with Philippine National Bank, $75 million with Asia United Bank, $65 million owed to China Banking Corp., and $20 million with Union Bank of the Philippines.

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Only China Bank has not signed the restructuring support agreement with PAL but the airline’s management claimed that the bank controlled by the Sy family was “supportive” of the airlines’ bailout plan.

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PAL president and chief operating officer Gilbert Santa Maria claimed the airline would exit the Chapter 11 process before the end of this year.

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