Unioil has a plan to pay its creditors and raise cash.

The Glendale-based firm, which filed for bankruptcy protection last August, said it reached a $2.5-million settlement with its largest creditor, the oil services division of Dow Chemical, for 78 cents on the dollar. The company said in its reorganization plan, filed in Denver, that it will pay other creditors 100% of what is owed to them over the next two years, with half to be paid once the plan is approved. The firm arranged to borrow $3 million from Joseph Associates, a New York-based partnership, and to issue an additional 6 million shares of stock at 50 cents a share to private investors to raise another $3 million.