Malaysia's High Court has granted approval for Malaysia Airlines (MAS) to conduct a capital restructuring and renounceable rights issue.
Under the restructure, the Oneworld carrier will reduce the par value of its shares from Malaysian ringgit (M$) 1.00 ($0.33) each to M$0.10, which will help to reduce the impact of its accumulated losses on its balance sheet.
The proposal was approved by MAS shareholders at an extraordinary general meeting held on 5 March, but this was subject to court approval, which was granted on 9 April.
In addition to the reduction in par value, MAS will undertake a renounceable rights issue of new shares priced at M$0.10 to raise a total of M$3.1 billion.
The amount will be used to fund pre-delivery payments of 17 Boeing 737-800s and five Airbus A330s, reduce its debt and bolster its working capital.
A prospectus for the proposed rights issue will be issued by the end of April, with the shares to be listed by the end of May, MAS says.
MAS is being advised by CIMB Investment Bank for both the capital restructure and the rights issue.