Malaysia Airlines (MAS) has secured its shareholders' approval for a proposed rights shares issue to raise 2.67 billion ringgit ($784 million) to fund its fleet expansion.

The shares are priced at 1.60 ringgit each. Existing shareholders will be offered one share for every one that they hold, says the carrier.

The funds will help pay for MAS's firm orders for 15 Airbus A330-300s and options for another 10.

"Proceeds from the rights issues will be used for MAS' fleet renewal programme and working capital," says MAS chairman Munir Majid.

"This gives us a strong and sustained platform for growth as we transform from a 100% leased fleet to owning at least a third of our aircraft."

MAS' shareholders also approved a 3.19 billion ringgit acquisition of six Airbus A380s, and the proposed bundling of four Boeing aircraft from lessor Penerbangan Malaysia Berhad (PMB), which owns 52% of MAS.

The four Boeing aircraft comprise two 777s and two 747s.

"Leasing provides flexibility but imposes additional costs With the new strategy of owning and leasing our aircraft, we will be able to improve our cost structure," says Munir.

The rights shares issue and the aircraft acquisitions will be completed by the first quarter of 2010, says the airline.

The carrier's new fleet will comprise up to 55 Boeing 737-800s, 25 Airbus A330-300s and six A380s. It expects to receive three 737-800s this year, and will receive all its new aircraft by 2016, says the airline.

Source: Air Transport Intelligence news