Malaysia Airlines to receive $890m injection from sovereign fund Khazanah

Photographer: Sanjit Das/Bloomberg

Malaysia’s sovereign wealth fund will pump an additional 3.6 billion ringgit ($890 million) in capital into the operator of Malaysia Airlines to pull the beleaguered flag carrier back from the financial brink.

Khazanah Nasional, which is the sole owner of the airline, decided to go ahead with the rescue after Malaysia Aviation Group announced Monday it won approval from a British court to proceed with a liability restructuring deal with aircraft leasing companies. The package includes lower lease rates and payment deferrals. The restructuring is due to conclude in early March.

The money will be used to fund business operations through 2025.

Malaysia Aviation’s earnings have deteriorated amid the coronavirus pandemic. The group went to its creditors to negotiate debt relief under British corporate law. Izham Ismail, the group CEO, said in October that the organization “has no choice but to shut down operations if it fails to win the cooperation of the creditors.”

The restructuring deal, combined with Malaysia Aviation’s own cost-cutting, will save 5.5 billion ringgit for 2020 alone. The company spent an estimated 9 billion ringgit a year in operational expenses prior to the pandemic, so the rescue will ease the blow from the coronavirus.

However, Malaysia’s infection count remains high, and air travel is expected to underperform at least through this year. Izham said Malaysia Aviation will expand travel products and services as it looks to erase the red ink, which persisted prior to the pandemic.

Passengers declined after the disappearance of a Malaysia Airlines flight in 2014, followed by another flight being shot down over Ukraine the same year. This prompted Khazanah to completely nationalize the airline, risking the commitment of more capital support down the road.

This article was first published in Nikkei Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.