MOF: MAS restructuring talks expected to be completed by Dec 31

KUALA LUMPUR: Discussions on Malaysia Airlines Bhd's (MAS) restructuring exercise are expected to be completed on Dec 31, says Deputy Finance Minister I Datuk Abd Rahim Bakri.

He told the Dewan Rakyat that the government had held discussions to ensure there would be a restructuring exercise on MAS’ debts and leases.

"I can see some progress and the discussions are expected to be finalised on Dec 31,2020," he said in reply to a supplementary question from Datuk Jalaluddin Alias (BN-Jelebu) during Question Time in the Dewan Rakyat on Tuesday (Dec 15).

Jalaluddin had asked the Finance Ministry on the government's restructuring plan to ensure MAS remains relevant despite only operating at 25% of its total capacity.

Abd Rahim said MAS, along with other carriers around the world, was badly hit by the impact of the Covid-19 pandemic on the economy and it was estimated that 75% of its aircraft were unable to fly due to travel restrictions, causing its capacity and profits to further decline.

He added that prior to the Covid-19 pandemic, the financial position of the Malaysia Aviation Group Bhd (MAGB) had already been declining from 2015 to 2018.

"In 2015, the group recorded a loss of RM1.15bil, and RM0.7bil (RM700mil) in 2016, followed by RM1.2bil in 2017 and RM1.3bil in 2018," he said.

Abd Rahim said MAGB’s total liquidity stood at RM366mil aside from the RM578mil that was ready to be used from the allocation by Khazanah Nasional Bhd as at Aug 31.

"In order to overcome MAGB’s and MAS’ financial problems, the government will hold further talks with Khazanah to find out the direction of the company, especially in strengthening the position of its finances, and identify the best strategic solutions, ” he said.

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