Tuesday, December 22, 2009

MAS Plans To Raise Right Issue ????????

NATIONAL carrier Malaysian Airline System Bhd (MAS) plans to raise at least RM2.67 billion from a rights issue to part finance new aircraft, its chief executive said on Tuesday. MAS, controlled by state investment firm Khazanah Nasional, has placed an order for 15 A330s with Airbus, Chief Executive Officer Azmil Zahruddin told a news conference.

Airlines globally have struggled in the past year as the economic crisis sapped demand for travel and trade, and as passengers turn to discount carriers to cut costs.

“We believe this is the best time to order aircraft. The aircraft will come in time when the economy picks up,” Azmil said.

The aircraft, to be delivered from 2011 to 2016, will serve the growing markets of South Asia, China, North Asia, Australia and Middle East, he said.

The MoU signed between MAS and Airbus in Kuala Lumpur on Tuesday has given the Malaysian airline the option to purchase another 10 A330s. The total cost of the 25 aircraft is $5 billion at list prices, said a MAS statement.

Apart from the one-for-one rights offering, Azmil said the airline also plans to raise new debt to fund the purchase, which is aimed at replacing older aircraft. On a separate issue, Azmil said MAS will take over aircraft order of six undelivered A380s from state-owned Penerbangan Malaysia, for RM1.54 billion.

MAS is expected to post a net loss of RM1.2 billion in 2009, according to the estimates of 10 analysts tracked by Thomson Reuters. Prior to the new purchase orders, MAS has firm orders for 35 B737-800 planes, with an option for another 20 B737s, costing a total of $4.2 billion.

Malaysia Airlines shares were halted from trade on Tuesday pending the announcement. The stock closed at RM3.05 on Monday.