Khazanah mulls providing up to $1.2b Malaysia Airlines aid

Bloomberg

Khazanah Nasional Bhd, Malaysia’s sovereign wealth fund, is considering providing as much as 5 billion ringgit ($1.2 billion) to the national flag carrier to see it through the coronavirus-induced slump in bookings, according to people familiar with the matter.
Malaysia Airlines Bhd would use the fresh capital to resume some operations it has suspended, the people said. If it is approved, the cash infusion could happen in the coming weeks, said the people, asking not to be named as the information is private.
A representative for Malaysia Airlines said that it is in ongoing discussions with Khazanah, which has been supportive of its efforts to cope with the impact of the Covid-19 pandemic, but that no specific amount of funds has been committed to the carrier. A Khazanah representative declined to comment.
Malaysia Airlines, which has been struggling to turn around since it was taken private by Khazanah in 2014, would join carriers around the world in receiving a lifeline from their respective shareholders and governments.
Authorities worldwide have pledged more than $85 billion to prop up airlines after the coronavirus pandemic wiped out travel demand and grounded fleets. Hong Kong’s flag carrier Cathay Pacific Airways Ltd announced an $5 billion rescue package that will leave the government with a 6.08% stake in the airline and two observers on the board. South Korea’s financial authority will extend a further $835 million in liquidity to Korean Air Lines Co, on top of the aid it received earlier this year, according to Yonhap News.
The Malaysian carrier is hoping to rebound from the near-halt in air travel brought on by Covid-19, and will undoubtedly look different when it emerges. It has named a new chairman, the president and CEO of national energy company Petroliam Nasional, whose appointment will be effective from July 1.
Wan Zulkiflee Wan Ariffin has already turned around one national champion in Petronas, which faced a commodity price rout beginning in 2014.
Malaysia Airlines has cancelled flights, deferred non-critical spending and cut costs since the onset of the crisis. In March, Malaysia’s government explored the possibility of bailing out its domestic airlines, people with knowledge of the matter said.