* Scheme received unanimous support of relevant lessors
* Khazanah to pump 3.6 bln rgt to fund MAG until 2025
* Group restructuring expected to complete early March
* Seeking to expand products, services beyond flights - CEO (Adds CEO’s quotes)
KUALA LUMPUR, Feb 22 (Reuters) - Malaysia Aviation Group obtained court approval in Britain on Monday 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 3.6 billion ringgit ($891 million).
MAG, parent of Malaysia Airlines, said the scheme received unanimous support of relevant lessors and represented a key component of a wider restructuring which will help to reduce its liabilities of more than 15 billion ringgit.
“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 3.6 billion ringgit 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.
“Operating lessors have continued to support the airline with a reset of lease rates to market and deferrals,” it said.
It said it has also taken steps to help it through the COVID-19 crisis via network cuts, structural cost savings, cash conservation and payment deferral initiatives amounting to 5.5 billion ringgit in 2020, with a target of 397 million ringgit for the first quarter this year.
Group Chief Executive Izham Ismail said MAG is shifting priorities regarding different business segments and subsidiaries in its portfolio in order to set itself up as a global travel group.
“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,” he said. ($1 = 4.0400 ringgit) (Reporting by Liz Lee. Editing by Jane Merriman)
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