MAS unveils plans to raise RM6 billion
Managing director Mohamad Nor Yusof said the additional capital would be used to repay debts, take delivery of five new aircraft and provide additional working capital.
Under the plan, the flag carrier would sell a 70-percent stake in wholly-owned unit MAS Catering to a consortium led by Lufthansa unit, LSG Skychefs, Mohamad Nor told a news conference.
It would also sell and leaseback its headquarters in Kuala Lumpur, and training centre and operations complex at the Kuala Lumpur International Airport to free up RM2.2 billion in cash, he said.
The property sale and leaseback would be executed via a special purpose vehicle owned by the Minister of Finance Inc (MOF) and the deals were expected to be completed by the first half of this year.
It hopes to raise by May this year another RM1.4 billion from the sale and leaseback of three of its existing Boeing 747-400 aircraft.
He said the carrier would take delivery of five new widebody aircraft and subsequently sell and leaseback these aircraft to an MOF special purpose vehicle and a funding institution for RM2.5 billion.
Additional capital
In all, Mohamad Nor said the carrier would raise at least RM6.1 billion of which RM2.5 billion was for the five new aircraft, RM1.5 billion to repay its yen-denominated bonds and RM1.3 billion to settle short-term loans, leaving it with RM820 million of additional working capital.
"The cash raised will facilitate us in shoring up our working capital," he added.
Mohamad Nor said Malaysia Airlines would eventually sell the remaining 30 percent of MAS Catering, but gave no details.
He announced Malaysia Airlines would resume services on eight international routes, including flights to Karachi, Manchester and Auckland.
Malaysia Airlines, which has suffered successive losses since 1997, was expected to report a net loss of RM1.4 - RM1.5 billion for the year to March 2002, he said.
"It's predictable. We're already (at) RM700 million loss (for the second quarter cumulative)... hopefully we have seen the worst," he added.
New facilitator
In response to reports Prime Minister Dr Mahathir Mohamad has appointed his economic adviser Nor Mohamed Yakcop to speed up the airline's revamp, the Malaysian airlines chief said Nor Mohamad was not part of the management team.
"He hasn't joined Malaysia Airlines but he is facilitating Malaysia Airlines very well," Mohamad Nor said.
He declined to say if Nor Mohamed was making management decisions but added it was only natural for the finance ministry to take a strong interest.
Malaysia Airlines, struggling under some RM10 billion in debt, has embarked on a restructuring plan last year to return to the black by 2004 after the government renationalised it in February.
Mahathir last week said the government was still considering requests by several foreign airlines to acquire stakes in the carrier and was likely to decide once the restructuring was completed.
