Malaysia Aviation Group received approval on Monday (22 February) from a court in the UK for a deal between its leasing unit and a majority of its aircraft operating lessors, allowing it to begin a restructuring plan with new capital of RM3.6 billion (US$891 million). MAG, parent of Malaysia Airlines, said the deal was approved by all relevant lessors and represented a key component of a wider restructuring that will help to reduce its liabilities of more than RM15 billion.
“Now that the scheme has been formally sanctioned by the UK court, the airline can proceed to implement its restructuring plan with the support of its sole shareholder, Khazanah Nasional Bhd and existing stakeholders,” the group said in a statement.
The restructuring marks a step forward for the company which has long been burdened with high costs and more recently the economic fallout from the coronavirus pandemic. Khazanah Nasional, also Malaysia’s sovereign wealth fund, will be committing the new capital of RM3.6 billion to the group to fund the business throughout until 2025. MAG said under the restructuring, expected to complete in early March, the airline will strike bilateral agreements with finance lessors, spare engine lessors, maintenance service providers, corporate lenders, and government-related entities, according to media reports.