Avation PLC (LSE:AVAP) noted that Philippine Airlines (PAL) has exited bankruptcy with a court approved restructuring plan, which is a positive development for the aircraft leasing firm.
PAL has retained a Boeing 777-300ER aircraft under lease from London-listed Avation in accordance with its restructuring plan.
"The restructuring of Philippine Airlines Ltd is a significant recovery and positive development for our investment in a Boeing 777-300ER aircraft," said Avation executive chair Jeff Chatfield.
Avation has been collecting monthly rent on the PAL aircraft based on hourly rates of utilisation in the period from September 2021 and PAL is up to date with these payments, the company noted.
Additionally, the company said it is entitled to receive a cash payment due this month covering utilisation in the period between September 2020 and September 3 2021, along with a promissory note for 25% of the aggregate rent outstanding for the period prior to 1 September 2020.
Avation said it expects the lease to PAL will continue to until the original scheduled termination date and, from March 1, lease payments will revert to a fixed market rate rent along with cash maintenance reserves.