Malaysia Aviation Group (MAG), the parent company of Malaysia Airlines, has been given the green light by a UK court to recapitalise and move forward with an aircraft lessor deal.
The approval allows MAG to reduce liabilities of more than 15 billion ringgit (US$3.71 billion) from its balance sheet. Agreements between aircraft lessors, maintenance providers, lenders, and state-owned companies will be renegotiated as part of the deal, according to Reuters.
Khazanah, the Malaysian government’s sovereign wealth fund and sole shareholder in MAG, will also inject 3.6 billion ringgit (US$891 million) to offer much-needed cash flow and support the airline through 2025.
Izham Ismail, Group Chief Executive at Malaysia Airlines, said the airline’s business strategy is being reviewed to better position itself for recovery. New initiatives could include growing non-flight revenue like low-cost rival Air Asia.
“We seek to expand MAG’s involvement into other travel-related products and services beyond flights, which will go a long way in helping our customers complete their end-to-end travel experience,” said Ismail, reported Reuters.
The news comes as the Oneworld alliance carrier grounded the bulk of its fleet, including a handful of flagship Airbus A380s.