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KUALA LUMPUR (September 22): Liquidity-strapped Malaysia Airlines Bhd postponed its next bond payments as the national carrier grapples with the economic impact of the COVID-19 crisis.
CIMB Investment Bank Bhd said that holders of Malaysia Airlines Perpetual Sukuk Musharakah’s unrated face value RM1.5 billion will have the bond repayment deferred for six months.
Issued in 2016, the next periodic distribution date is September 30.
According to CIMB Investment Bank, through an announcement posted on Bank Negara Malaysia’s (BNM) Fully Automated Issuance and Bidding System (FAST) site, the operator has issued postponement notices dated September 17 to holders of your Islamic voucher. .
“Pursuant to the foregoing, please note that there will be no payment of periodic distribution amounts to sukuk holders on the periodic distribution date with respect to the following periodic distribution periods: (1) March 29, 2019 to September 30, 2019; (2) from September 30, 2019 to March 31, 2020; (3) from March 31, 2020 to September 30, 2020.
“Accordingly, the periodic distribution date will be postponed until the next periodic distribution date, that is, March 31, 2021,” the announcement reads.
The airline issued the sukuk to raise funds for working capital and general investment, among others.
Malaysia Airlines has continued to post losses even after a RM6 billion bailout and privatization exercise by its sole shareholder, the sovereign wealth fund Khazanah Nasional Bhd, in 2014 as overcapacity, rising fuel costs and the depreciation of the ringgit prevented yields from increasing. The situation has been exacerbated by the COVID-19 pandemic, which paralyzed the travel industry.
Malaysia Airlines reduced its net loss by 2.5% year-on-year to RM791.71 million in the financial year ended December 31, 2018, as revenue improved a slight 0.8% year-on-year to RM8.74 billion. ringgit.
In June, Malaysia Airlines said it is readjusting its long-term business plan (LTBP1), which was revealed in July 2019, to the changing aviation landscape.
LTBP1 replaces the 12-point MAS Recovery Plan, which was announced in 2014 and finalized last year. The LTBP1 would have seen the national airline reach financial breakeven by 2022 and generate enough revenue to cover the cost of capital of its operations two years after that.
On July 28, Malaysia Airlines said it had not received any government funding. He added that Khazanah had supported his efforts to address and cope with the impact of the COVID-19 crisis, but had not committed any additional funding for the airline.
At the time, he was responding to a weekly report by The Edge, citing sources, that he had obtained new funding worth $ 300 million to help overcome the pandemic crisis.
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