Malaysia Airlines has just received support in terms of finance from its shareholder and creditors to continue its business.
UK court approved Malaysia Aviation Group (MAG), the parent company of Malaysia Airlines, to reduce liabilities of more than 15 billion ringgit (3.71 billion USD) from its balance sheet. The airline will proceed with a liability restructuring deal with aircraft leasing companies, maintenance providers, lenders, and state-owned companies. The restructuring is due to conclude in early March.
The restructuring deal, combined with MAG’s own cost-cutting, will save 5.5 billion ringgit for the airline.
Last October, MAG went to its creditors to negotiate debt relief under British corporate law. Izham Ismail, Group CEO of Malaysia Airlines said that the airline “has no choice but to shut down operations if it fails to win the cooperation of the creditors”.
In addition, Khazanah Nasional, the sole shareholder of the airline, will pump an additional 3.6 billion ringgit (890 million USD) in capital into the operator of Malaysia Airlines to offer much-needed cash flow and fund business operations through 2025.
Malaysia Airlines are reported that it is reviewing the business strategy to better position itself for recovery.
He said: “We seek to expand MAG’s involvement into other travel-related products and services beyond flights, which will go a long way in helping our customers complete their end-to-end travel experience.”