Khazanah waiting for Malaysia Airlines to come up with strategic plan

Photographer: Sanjit Das/Bloomberg

Malaysia’s sovereign wealth fund Khazanah Nasional said it is waiting for Malaysia Airlines to come up with a strategic plan as the national carrier is severely hit by the COVID-19 pandemic, according to its managing director.

“Malaysia Airlines is working on a plan, we’re waiting to see what that plan is and then we’ll provide input and see what assistance we can do to help them with the plan. But it will take some time to work out,” Khazanah Nasional managing director Shahril Ridza Ridzuan said at the sidelines of Invest Malaysia 2020.

He did not elaborate on the timeline Malaysia Airlines will have to finalise the plan. Khazanah is the sole owner of Malaysia Airlines.

“Quite clearly there’s time pressure, they need to figure it out as soon as possible. But we leave it in their hands. They have to figure out the plan then present it to shareholders,” Shahril said. 

The aviation industry is one of the worst-affected as countries imposed travel bans and stay-home orders to contain the deadly and highly-infectious COVID-19 pandemic. Malaysia Airlines has been struggling to turn around since it was taken private in 2014, even before the COVID-19 outbreak.

Similar to all airlines, during the period of the pandemic, Shahril said demand and capacity have dropped to less than 5 per cent of what it used to be, and even now after the lifting of the Movement Control Order.

“Demand is slowly picking up. People are adjusting and that’s what makes it tricky in terms of being able to project what’s the real demand going to be,” he said, adding that it will take time for the market to recover.

Elsewhere, Hong Kong’s Cathay Pacific Airways announced a recapitalisation plan worth HK$39 billion ($5.03 billion) led by the Hong Kong government last month. The plan includes the issuance of preference shares, warrants, bridging loans and rights issue, to help it weather the coronavirus pandemic, according to Reuters.

Nearer home, Temasek-backed Singapore Airlines said last month that it had secured about $1 billion in credit facilities, in addition to the S$8.8 billion ($6.32 billion) it recently raised from a rights issue, to help it weather the COVID-19 pandemic.

Singapore Airlines reportedly said it had raised S$900 million through loans on some of its aircraft. It had also arranged new lines of credit and a short-term loan with several banks for further liquidity of more than S$500 million.

Malaysian budget carrier AirAsia Group said it has applied for bank loans to shore up its liquidity and has also been presented with proposals to raise capital to strengthen equity base or liquidity from investment bankers and lenders.

AirAsia has ongoing deliberations with a number of parties for joint-ventures and collaborations that may result in additional third-party investments in specific segments of the group’s business, it said.

On Monday, AirAsia Group reported a net loss of RM803.85 million for the first quarter ended March 31, 2020 as compared to a net profit of RM96.09 million a year ago.

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.

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.