KUALA LUMPUR: Khazanah Nasional Bhd yesterday emphasised that the RM6 billion investment the state fund has allocated to revive Malaysia Airlines (MAS) is not a bailout.
Managing director Tan Sri Azman Mokhtar said the state fund was able to recover the investment through the relisting of the national carrier within end-2017 and end-2019, under a formation of a new company.
The new company is targeted to return to profitability within three years of delisting, which is targeted to be completed by year-end.
It will critically involve a significantly corrected cost and operational structure and workforce, properly benchmarked to competitive industry practices and norms.
“The key fulcrum to that proposition here is the ability of MAS to turn around.
“We have diagnosed the problem and the medicine we believe here are the ones that we are putting conditionality on,” he told reporters after unveiling 12-point enabling plan to drive
the national carrier into profitability.
Azman was replying to a question on how Khazanah would recover the RM6 billion it injected under MAS recovery plan. “The medicine is linked to the money coming in. You don’t take the medicine, we don’t give the money,” he said, adding that MAS would not be broken into smaller entities.
Previously, Khazanah has injected RM7 billion into MAS for corporate purposes under GLC Transformation Programme.
The state fund is injecting up to RM6 billion on a staggered and conditional basis over a three-year period.
Of the RM6 billion investment, RM1.4 billion will be used for delisting of MAS old company and RM1.6 billion for restructuring and retrenchment cost at MAS OldCo, subject to strict conditionality, said Azman.
He said the remaining RM3 billion will be used as progressive capital injection into New MAS, on a staggered and milestone basis, over a three-year period from 2014 and 2016.
Meanwhile, Kumpulan Wang Persaraan has agreed to swap a total of up to RM750 million of its existing perpetual sukuk into ordinary equity, subject to a definitive agreement between relevant parties. — Bernama