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Tuesday, 05 March 2013, Subang – Malaysia’s national carrier Malaysian Airline System Berhad (“MAS” or “Malaysia Airlines” or the “Company”) announced today that shareholders have approved all the resolutions proposed at the Company’s Extraordinary General Meeting (“EGM”) held earlier this morning, which relates to a proposed capital restructuring exercise and a rights issue to raiseequity capital (the “Proposals”).
On 27 November 2012, MAS had announced its proposal to rationalise its balance sheet and set off accumulated losses of the Company through a capital restructuring exercise. In addition, the Company also announced its plan to raise up to RM3.1 billion via a renounceable Rights Issue.
Commenting on the outcome, Ahmad Jauhari Yahya, the Group Chief Executive Officer of MAS said, “We are pleased with the support of our shareholders. In end 2011, we had announced a Business Plan to initiate the recovery of the Company, which focuses on building a profitable network, to win back our customers and to manage our costs. The Proposals approved today are part of our recovery plan. The implementation of the Proposals will allow MAS to effectively “reset” our business model and to “reboot” our financials. As Malaysia’s national flag carrier, MAS has to remain relevant in the industry, and we need to strengthen our balance sheet fundamentals to enable the Group to grow and expand in a sustainable manner.”
MAS targets to raise gross proceeds of up to RM3.1 billion from the rights issue, which is expected to be completed by the first half of this year. The proceeds of the capital raising will be used for capital expenditure, to partially deliver the Company, and the remaining will be used for working capital. The rights issue price and entitlement basis have not been fixed and will be determined closer to the date of implementation, after all approvals for the Proposals have been obtained.
MAS’ Business Plan depends on several drivers, which includes a re-fleeting programme, introducing the new flagship A380 aircraft, as well as the new generation B737s and A330s. MAS will also be embarking on strategic partnerships, such as MAS’ recent acceptance into the oneworld® alliance, which provides MAS with greater connectivity to a wider network and allows MAS to expand its customer reach. MAS continues to focus on building revenue on its existing cost base by improving productivity and efficiency of its operations, and retooling its network and sales channels. The capital restructuring and rights issue exercise will allow MAS to rationalise and recapitalise its balance sheet in a sustainable manner and will be a critical enabler to place MAS on a stable platform to meet its capital expenditure and operational requirements, which is critical for its turnaround efforts.
The Group has reported two consecutive quarters of profits. MAS has recently announced that the Group recorded a Net Income After Tax (NIAT) of RM51 million for the fourth quarter ended 31 December 2012 against a Net Loss after Tax of RM1.3 billion in the previous corresponding quarter. For the full year of 2012, Malaysia Airlines reported a Net Loss after Tax of RM433 million compared to a Net Loss after Tax of RM2.52 billion registered for the 12 months ended 31 December 2011.
In closing, Ahmad Jauhari said, “We will continue to focus on achieving sustainable profits, which can only be realised with a clean and recapitalized balance sheet and we thank the shareholders for their unwavering support. The adoption of the resolutions today paves the way towards achieving the long term strategic objectives and growth of the Company.”
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