MAS airlines may need small rights issue for cash<\/p>\n
KUALA LUMPUR (AFP): Malaysia Airline System Bhd (MAS) could
\nopt for a "small rights issue" to raise cash to part-finance
\npurchase of 25 new Boeings due to arrive over the next five years
\nas it expands its fleet.<\/p>\n
MAS chairman Tajudin Ramli told Bernama news agency in an
\ninterview published yesterday that the national airline company
\nwas only short of 500 million ringgit (US$200 million) to finance
\nthe 10-billion-ringgit ($4 billion) expansion plan.<\/p>\n
Tajudin, who in July dismissed the need for a rights issue,
\nmaintained that MAS still had "a very strong cash flow
\nsituation."<\/p>\n
"We have already paid a certain amount for the 25 aircraft.
\nWhat we need to do as we go along is to pay a small amount every
\nyear," said Tajudin, who controls 32 percent of the national
\nairline company.<\/p>\n
"The total amount is less than $4 billion. Over the next five
\nyears, our cash flow will be very strong and we are going to sell
\nour old aircraft anyway," Tajudin added.<\/p>\n
He said based on his calculations, MAS would only be short of
\n500 million ringgit. "And that is five years away."<\/p>\n
"If we undertake a small rights issue, that would be more than
\nsufficient to take care of that half a billion ringgit. I am not
\nparticularly worried about it," he asserted.<\/p>\n
MAS has since July been trying to convince industry analysts
\nthat it will have no problems financing the fleet-expansion,
\nafter ordering in January 15 Boeing 777s and 10 747-400s, with an
\noption for two Boeing 777s and three Boeing 747-400s, from The
\nU.S. Boeing Commercial Airplane Group.<\/p>\n
Analysts have doubted MAS's ability to pay for the purchase,
\ngiven its present debts of over six billion ringgit.<\/p>\n
"Our gearing ratio has come down to 1:6 from 1:8 previously
\nand we are working to reduce it further," Tajudin said, adding
\nthat the company was continually seeking for the best ways to
\nfinance its capital requirements.<\/p>\n
"This is an ongoing exercise. We are not quite happy with 1:6.
\nIn fact we want to bring it much lower," he said.<\/p>\n
Tajudin also said MAS was still discussing with Boeing a plan
\nto buy at least six Boeing super jumbo in order to be its launch
\ncustomer.<\/p>\n
Tajudin also revealed plans to forge additional strategic
\nalliances with airlines in Europe and North America after having
\nbenefited from such and alliance with Virgin Atlantic of Britain
\nand Ansett Airlines of Australia.<\/p>\n
Speculation has been rife that Tajudin planned to divest his
\nstakes in MAS. But Tajudin on Friday said the divestment had
\nnever crossed his mind at all.<\/p>\n
"Otherwise, why should I spend so much time and effort doing
\nwhat I am doing today," he had said.<\/p>\n
MAS stock ended five sen lower at 6.45 ringgit on the local
\nbourse Monday.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mas-airlines-may-need-small-rights-issue-for-cash-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}