As speculation intensifies that PAL Holdings may be about to file for Chapter 11 bankruptcy protection in the United States, unnamed sources close to the matter told Bloomberg Law in recent days that Philippine Airlines (PR, Manila Ninoy Aquino Int'l) is in talks to raise about USD500 million as part of such a restructuring plan.

The fundraising would be part of a comprehensive restructuring plan at the company that it is considering filing with a US court, the sources explained. Half of the USD500 million would emanate from local banks, while billionaire Lucio Tan, who controls the carrier, would put up the remaining USD250 million, the sources alleged.

As previously reported, Philippine Airlines has also been in talks with lessors about reducing its fleet size - an angle to the story that people familiar with the matter confirmed to Bloomberg Law.

Reports that PAL Holdings was considering a Chapter 11 filing in New York initially emerged in November 2020.

In a stock market filing on May 11, the holding company neither confirmed nor denied its intentions to undertake a mass restructuring of its airline subsidiaries.

"PAL is considering all options available to it, including a comprehensive restructuring plan that will ensure its viability and, support the Chairman’s commitment to continue its operations. As of the moment, there is no definite option that has been officially approved," it said.