Malaysia Aviation Group obtained court approval in Britain on Monday for an agreement between the airline's leasing unit and a majority of its aircraft operating lessors, allowing it to begin a restructuring plan with new capital of RM3.6 billion (US$891 million).
MAG, the parent of Malaysia Airlines, said on Monday the scheme received the unanimous support of relevant lessors and represented an important component of a wider restructuring which will help to reduce its liabilities of more than RM15 billion.
"Now that the scheme has been formally sanctioned by the UK court, the airline can proceed to implement its restructuring plan with the support of its sole shareholder, Khazanah Nasional Bhd and existing stakeholders," the group said in a statement.
The restructuring marks a step forward for the company, which has been long been burdened with high costs and more recently, the fallout from the coronavirus pandemic.
Khazanah Nasional, also Malaysia's sovereign wealth fund, will be committing the new capital of RM3.6 billion to the group to fund the business throughout until 2025.
MAG said under the restructuring, expected to complete in early March, the airline will achieve bilateral agreements with finance lessors, spare engine lessors, maintenance service providers, corporate lenders and government-related entities.
"Operating lessors have continued to support the airline with a reset of lease rates to market and deferrals," it said.
It said it has also taken steps to help it through the Covid-19 crisis via network cuts, structural cost savings, cash conservation and payment deferral initiatives amounting to RM5.5 billion in 2020, with a target of RM397 million for the first quarter this year.
- Reuters
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