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Transmile to dispose four aircraft for US$68m

January 10, 2011

KUALA LUMPUR: Transmile Group Bhd has proposed to dispose of four of its MD-11F aircraft for a cash consideration of US$68 million (RM208.8 million) to US-based Federal Express Corporation.

In a filing to Bursa Malaysia today, it said the proceeds from the disposal via its subsidiary, Transmile Air Services Sdn Bhd (TAS), has been earmarked to partially settle the group’s outstanding debts.

It said the aircraft are currently not revenue generating and have been left idle since April 2008, as the group is unable to identify any viable routes to put the aircraft to service.

“As such, the proposed disposal provides an opportunity to the group to realise the value of the aircraft and apply the disposal consideration to partially settle the group’s outstanding debt obligations,” it added.

The debts namely are the US$115 million syndicated term loan of Transmile Air (SPV) Limited, the 1.0% guaranteed convertible bonds due 2010 issued by TGB (SPV) Ltd, and the RM150 million medium term notes programmes of TAS.

“With the completion of the proposed disposal and utilisation, the netamount of outstanding debt obligations to be restructured pursuant to the debt restructuring is expected to be reduced by up to 39% to approximately RM320.1 million,” it explained.

It added that the idling of the aircraft will continue to be a financial burden to the group due to the fixed parking, storage and maintenance costs and other expenses of approximately RM1.18 million per annum incurred.

– Bernama


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