Ailing MAS may sell headquarters, assets to raise funds
Ailing MAS may sell headquarters, assets to raise funds
Associated Press, Kuala Lumpur
National carrier Malaysia Airlines may sell its headquarters
and other assets to raise part of 3 billion ringgit (US$794
million) it needs to revamp the organization and return to the
black, a media report said on Thursday.
The airline's new managing director Idris Jala told a group of
senators earlier this week that the sale would raise 1.5 billion
ringgit and help trim losses, Senator Sharipah Aminah Syed
Mohamed was quoted as saying by the New Straits Times newspaper.
But senators disagreed with the proposed sale of the building
housing the airline's headquarters in central Kuala Lumpur, the
country's largest city, saying it would seriously hurt the
carrier's image.
They urged Idris to carry out independent financial audits to
investigate if the company's losses were due to mismanagement of
funds and fraud.
"We told him to clean up the national carrier," said Senator
Kamarudin Ambok, according to the report. "It's not possible for
a company to suffer such losses if there was no mismanagement."
Airline officials were not available to confirm the report.
Idris, who joined the airline Dec. 1, has said the carrier
needed 3 billion ringgit to restructure after posting two
straight quarters of losses. He said he will submit details of a
turnaround plan to the government by late February.
It is unclear if the 3 billion ringgit is in addition to the
company's cash balance of 1.42 billion ringgit as of Sept. 30.
Prime Minister Abdullah Ahmad Badawi earlier this month said
the government - which owns 69 percent of Malaysia Airlines - is
prepared to lend money to the carrier but that any financial help
should not be considered a handout.
The carrier posted its second straight quarterly loss of 367.7
million ringgit in the quarter through September, a sharp
reversal from a net profit of 132.7 million ringgit in the same
period a year earlier.
Results were also worse than the 280.7 million ringgit loss in
the quarter through June.
Analysts said the airline - which operates one of Southeast
Asia's biggest passenger plane fleets with about 100 aircraft -
has been hit by poor management, escalating operating and fuel
costs, and stiff competition in the region.
Malaysia Airlines recently raised fuel surcharges aggressively
and has deferred indefinitely plans to fly to six new Indian and
Chinese destinations. Reports said it may raise airfares next
month on all routes to cover its losses but the airline has
declined to comment.