Financial woes at Malaysia Airlines (MAS) have prompted the carrier’s new managing director to consider selling remaining assets to raise cash.
The state-owned carrier told the Kuala Lumpur stock exchange that “in view of the losses suffered by Malaysia Airlines for two consecutive quarters, the company is now looking at various options to meet its funding needs”. It says one of the serious options considered is the disposal of its assets, which would include its headquarters building in central Kuala Lumpur.
MAS is drawing up a turnaround plan aimed at making it consistently profitable. A new managing director, former Shell executive Idris Jala, took over in December and his revamp proposals are expected to be presented to the Malaysian government shortly.
State-backed media recently reported that MAS needs 3 billion ringgit ($795 million) to restructure its operations. Reports have said that the sale of the headquarters building may raise 1.5 billion ringgit.
The government owns 69% of MAS and has expressed disappointment over the airline’s deteriorating financial position. In August then-managing director Ahmad Fuaad Dahlan resigned abruptly after the airline reported losses for its fiscal first quarter.
MAS has few assets left. It last suffered a financial crisis between 2000 and 2002, when the government renationalised the flag carrier, and a turnaround plan comprised the sale to the government of nearly all its assets, including aircraft and properties, which were immediately leased back.
Its headquarters building, which is its flagship property and its key remaining asset, was originally due to have been sold and leased back during the last restructuring, but the sale plan was later dropped. ■
Source: Airline Business