KUALA LUMPUR – As talks with creditors drag on, Malaysia Airlines Bhd (MAB) has sought financial aid from its sole shareholder, Khazanah Nasional Bhd, The Edge reports today.
Without giving a confirmed figure, the report quoted sources as saying that the national carrier might be looking at acquiring US$500 million (RM2.05 billion) to stay afloat.
Previously, The Vibes reported that the government is expected to pay up to RM3.5 billion for an “immediate or phased liquidation” and “redundant employee” compensation if MAB shuts down, according to a December 2019 Khazanah Nasional board paper.
According to documents sighted by The Vibes, other obligations to be settled were a loan of up to RM6.7 billion from the Finance Ministry-owned Turus Pesawat Sdn Bhd for six Airbus A380s and two A330 jets, and a RM1.5 billion perpetual sukuk, whose only subscriber – the civil servants’ pension fund Retirement Fund Inc – will be required to take a haircut.
The Edge's report today said MAB is in talks with 40 creditors and lessors as it proceeds with its RM16 billion debt restructuring programme, which is in the final stage, according to the Malaysian Aviation Group (MAG) – MAB’s parent company.
“The company continues to make progress towards a consensual restructuring,” MAG was quoted as saying.
MAG also said it aims to reach a commercial agreement in the first week of December.
When contacted by The Edge, Khazanah said it will support MAG’s restructuring efforts but “any funding for the airline will depend on the outcome of discussions with creditors and debtors”.
The Vibes had reported on October 14 that MAB posted RM791.7 million in after-tax losses for the financial year ended December 31, 2018. Shareholders’ equity was -RM842.1 million after total liabilities (RM5.97 billion) exceeded total assets (RM5.12 billion).
MAB never found its footing after Khazanah took it private in 2014 following the disappearance of Malaysia Airlines Flight MH370 en route from Kuala Lumpur to Beijing and the downing of Flight MH17 over eastern Ukraine, spending RM1.4 billion for 30% of the company that the fund did not own then.
Talks on securing a strategic partner have also ground to a halt, and turnaround effects have been further upended by the pandemic.
The government has said it will not bail out MAB, instead leaving the airline’s fate to Khazanah. – The Vibes, November 21, 2020
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