Malaysia Airlines (MH, Kuala Lumpur International) is on track with its restructuring programme the carrier's majority shareholder, Khazanah Nasional Berhad, has said. The carrier's overhaul has taken on an air of increased urgency after it reported a third quarter net loss of MYR576.11 million (USD170.39 million), up from MYR375.4 million in the same period last year. For the first nine months of this year, Malaysian Airline System (MAS) has racked up cumulative losses amounting to MYR1.32billion (USD390.1million).
Last week, the Malaysian Airline System Bhd (Administration) Bill 2014 formalizing the establishment of Malaysia Airlines Bhd, the successor to Malaysian Airline System Bhd, as the national carrier was tabled in Parliament for its first reading.
Khazanah said Malaysia Airlines Bhd was incorporated on November 7 and will act as a vehicle for the migration of Malaysia Airlines' relevant operations, assets and liabilities. The NewCo is targeted to be operational by July 1, 2015, with the aim of turning profitable by 2017.
Earlier this month, MAS' minority shareholders approved Khazanah’s proposal for a selective capital reduction and repayment exercise (“SCR”) paving the way for the carrier's delisting from the Bursa Malaysia. The SCR is expected to be completed by December 3, pending approval from the High Court.
Once complete and with the NewCo in place, the Malaysian sovereign wealth fund says it would then be in a position to disburse MYR2billion out of a total of MYR6billion (USD976.67million) in funding at the end of December. This first tranche will go towards reimbursing MAS minority shareholders under the proposed SCR, as well as working capital and restructuring expenditure.
"The restructuring of MAS is well on track, with several major milestones reached and several more expected in the next quarter, particularly by the end of the year. As the Government has emphasised, nothing short of a complete overhaul is required," Tan Sri Dato’ Azman Hj. Mokhtar, Khazanah's Managing Director, said.
