[ad_1]
SINGAPORE (REUTERS) – Malaysia Aviation Group (MAG), Malaysia Airlines’ holding company, said in a letter to lessors that the group is unlikely to be able to make payments due after November unless it receives more funds from the state Khazanah fund. .
The letter, reviewed by Reuters, follows a request by the troubled airline for deep discounts on aircraft rentals from its lessors as part of a comprehensive restructuring plan, three sources with knowledge of the matter said.
According to the letter, the aviation group was experiencing “an average monthly operating cash burn of US $ 84 million (Singapore $ 114.6 million)” but only had US $ 88 million in liquidity as of August 31 and An additional 139 million available from Khazanah. its sole shareholder.
“Based on the current execution rate, without further funding from shareholders, it is likely that the group will not be able to meet its obligations, including payments to lessors, after November 2020,” he said.
The letter was sent last month, but the exact date was not immediately clear.
Malaysia Aviation Group and Khazanah had no immediate comment in response to Reuters inquiries.
Malaysia’s national airline has struggled to recover from two tragedies in 2014: the mysterious disappearance of Flight MH370 and the downing of Flight MH17 over eastern Ukraine.
Khazanah took it private that year as part of a $ 1.5 billion restructuring, but efforts to roll back his business have been further affected by the coronavirus pandemic.
Malaysia Airlines plans to negotiate the deep discounts with its lessors through a restructuring plan that it seeks to implement through a British court process, said the sources, who declined to be identified due to the sensitivity of the matter.
In addition to Malaysia Airlines, the group of holding companies includes other companies and local entities involved in aircraft leasing and ground handling services.
Meanwhile, MAG said in a statement on Friday that it is embarking on an urgent restructuring of its business and capital structure, as the Covid-19 pandemic shows little signs of relief, The Star reported online.
It said that while its long-term business plan (LTBP) launched in early 2019 had led to significant operational improvements, the Covid-19 pandemic has led to unprecedented lockdowns around the world.
“The profound impact of the prolonged Covid-19 crisis has forced MAG to take drastic steps in reviewing its LTBP to ensure the group’s relevance and survival.
“This includes reworking its network and fleet plans, in order to cope not only with the uncertain and volatile aviation landscape, but also with smoother traffic demand for the foreseeable future,” he said.
[ad_2]
