The bond issue to fund the national carrier's ambitious plan has been fully subscribed.
KUALA LUMPUR: Flag carrier Malaysia Airlines (MAS) said today its RM2.5 billion (US$786 million) Islamic bond issue to fund an ambitious plan to overcome financial difficulties has been fully subscribed.
“I am delighted to announce to you that our entire sukuk programme is fully subscribed,” MAS group CEO Ahmad Jauhari Yahya said in a statement.
MAS last month announced a series of funding plans after scrapping a controversial share swap deal with budget carrier AirAsia.
AirAsia had agreed in August to buy 20.5% of MAS under a strategic tie-up aimed at turning around the struggling national carrier but the deal was pulled after months of pressure from its powerful employees union.
Among its cost-cutting moves were the axing of loss-making routes, concentrating on lucrative routes in Asia and plans to lay off staff.
It is also acquiring new aircraft including six new Airbus A380s and two new Airbus A330 to improve fuel efficiency.
In February the company admitted it was “in crisis” after saying it lost RM2.52 billion last year largely due to soaring fuel costs.
And for the quarter ended March 31, MAS reported its fifth consecutive loss amounting to RM171.8 million, compared with a loss of RM242.3 million a year earlier.
Malaysia is the world’s biggest market for Islamic bonds.
Islamic banking fuses principles of Islamic law and modern banking. Islamic funds are banned from investing in companies associated with tobacco, alcohol or gambling.