Malaysia Airlines (MAS) has finalised its restructuring plans, covering asset sales and the effective separation of loss-making domestic operations from healthier international operations. After more than six months of work it signed conditional contracts with its government owners last week.
All assets and liabilities will be transferred to entities under government control in debt-for-equity swaps and sale/lease-back deals. The assets will then be leased back to the carrier on "normal commercial terms". International passenger services and cargo operations will remain with MAS, but loss-making domestic passenger services will be transferred to an entity under government control and operated by MAS on behalf of the state for a fee.
After the transactions are completed a government company will own 69.3% of the carrier. "MAS's earnings are expected to show immediate improvements," it says.
MAS has also signed a conditional agreement to sell 70% of its loss-making catering unit to a consortium involving a local group and LSG Sky Chefs.
In May MAS reported its fifth consecutive year of losses for the 12 months ended 31 March, 2002. Net losses for the first quarter of 2002 were cut to 80.79 million ringgit ($21.3 million) from 320.69 million ringgit for the same quarter last year.
Source: Flight International
