Advertisement
Khazanah to stop funding Malaysia Airlines if rescue talks with lessor fail
- Malaysia Aviation Group sets out an alternative plan to divert funds to a sister airline unit if the state carrier’s bailout talks with lessors are unsuccessful
- Malaysian finance minister said that the government would not provide financial relief to the national airline
Reading Time:3 minutes
Why you can trust SCMP
The parent of Malaysia Airlines has warned leasing companies that state fund Khazanah will stop funding the group and force it into a winding down process if restructuring talks with lessors are unsuccessful, according to a letter seen by Reuters.
Advertisement
The warning from Malaysia Aviation Group (MAG), the holding company for the state carrier, raises the stakes in negotiations for a financial shake-up known as “Plan A” and sets out an alternative plan to divert funds to a sister airline unit called Firefly.
“In the event Plan A fails, shareholder (Khazanah) will cease funding for MAG and will trigger winding down/liquidation process for MAG,” according to the document, the contents of which were confirmed by six people familiar with the matter.
Khazanah, MAG’s sole shareholder, declined to comment.
Finance Minister Tengku Zafrul Abdul Aziz said in a radio interview on Thursday that the government would not provide financial relief or debt guarantees to the airline.
Advertisement
Advertisement