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MAS secures RM5b financing for aircraft

November 21, 2012

The facility will be used to finance the purchase of six Airbus A380-800, one Airbus A330- 200F and one Airbus A330-300 and other related expenses.

By Anuja Ravendran

KUALA LUMPUR: Malaysian Airline System Bhd (MAS) has entered into an Islamic financing scheme of up to RM5.3 billion to fund the purchase of eight aircraft.

The national carrier had executed a master facility for a Bai’ Bithaman Ajil Islamic financing arrangement with Turus Pesawat Sdn Bhd, a special purpose company owned by the Ministry of Finance (MoF), to provide financing facilities.

The current facility will be used to finance the purchase of six Airbus A380-800, one Airbus A330- 200F and one Airbus A330-300 and other related expenses, MAS said in a filing to the exchange yesterday.

The related expenses will include pre-delivery progressive payments including advances paid by MAS for the purchase of the aircraft, the balance purchase price of the aircraft (if any) including buyer furnished equipment, redemption of any bridging facility or credit lines undertaken in relation to the purchases; and other costs as may be determined by Turus Pesawat.

MAS first announced its intention to lease the aircraft from an MoF-owned special purpose vehicle on on May 22, as part of a debt market funding plan for the company which is presently on a turnaround mode to improve its weakening financial performance in the last few years.

Under the plan, MAS also proposed to launch a sukuk programme for RM2.5 billion to address its working capital requirements.

In addition, the national carrier said it had received a bridging loan of RM1 billion f rom a local commercial bank on March 30, to ensure working capital cash balances remain adequate until the expected drawdown of the first tranche of the proposed sukuk.

MAS had also indicated plans to embark on commercial funding of aircraft capital expenditure (capex) for which it said it had received funding commitments and proposals from numerous third party financiers.

The capex financing would cover remaining aircraft capex obligations in 2012, and also for some capex obligations in 2013, it said.

This content is provided by FMT content partner The Malaysian Reserve.


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