PETALING JAYA: Khazanah Nasional Bhd will continue to provide support and cooperation to ensure Malaysia Airlines’ sustainability post-pandemic and will focus on supporting the national carrier’s holding company Malaysia Aviation Group Bhd (MAG) with its internal restructuring in 2021.
Khazanah managing director Datuk Shahril Ridza Ridzuan said what it has done with the airline’s restructuring plan is to essentially negotiate well with its stakeholders.
“Khazanah has committed to putting in up to RM3.5 billion over the course of five years for the restructuring plan. We accept that Malaysia Airlines is strategic to the country especially at this time when other airlines are not flying. We still need a national airline to connect to the world, to bring in cargo and supplies like vaccines.
“The investments that we’re doing over the few years to keep it going until it gets to the turnaround is part of that necessary, critical support of our economy and infrastructure,” he said at the Khazanah Annual Review 2021 webinar media briefing on Thursday.
MAG, he said, will focus on working closely with government and stakeholders on restarting air travel and promoting industry recovery and implementing the internal restructuring, continuing cash conservation initiatives while capturing demand recovery.
On Feb 22, 2021, the High Court of Justice of England and Wales sanctioned a scheme of agreement between MAG’s leasing entity MAB Leasing Ltd, and the majority of MAG’s aircraft operating lessors, following unanimous support from the lessors. This represents an important component of the wider restructuring exercise which will achieve a reduction in MAGB’s liabilities of over RM15 billion.
The internal restructuring achieved RM5.5 billion in cost avoidance in 2020, addressed over RM15 billion of outstanding debt on its capital structure, secured significant liquidity support from creditors, deferred delivery of new aircrafts, and achieved variabilisation of fixed-cost structure.
Of Khazanah’s RM6 billion impairments last year, RM3.1 billion was for MAG.
Shahril said in the current environment, any discussion involving new investors for the airline will only occur after a recovery in the aviation market, which it does not expect until 2023.
