Malaysia: Khazanah to finalise decision on Malaysia Airlines in 2020

  • KHAZANAH Nasional Berhad is still reviewing potential partners for ailing national carrier Malaysia Airlines Bhd, the sovereign wealth fund said in its 2019 report which was released on 7 Jul 20.
  • According to records filed with the Companies Commission of Malaysia (SSM) sighted by The Malaysian Insight, MAB reported a net loss of MYR791.70mn for the financial year-ended 31 Dec 18 against MYR812.11mn in 2019.
  • Revenue improved marginally by 0.8% to MYR8.73bn from MYR8.67bn. Based on Khazanah’s 12-point turnaround plan, the airline was supposed to have returned to the black in 2019.
  • The fund previously committed to inject MYR6bn to save the airline. MAB was one of two highlights the fund mentioned as part of investments in its “strategic fund”.
  • As part of Khazanah’s “refreshed mandate” under the former Pakatan Harapan government, it had restructured its investments under a “commercial” and “strategic fund”.
  • The other highlight of the report was that Khazanah saved about MYR42bn by restructuring toll rates for highways under PLUS in 2018.
  • This also gave consumers an 18% reduction of toll rates that started in Feb 19 at highways, such as the North-South Expressway. “In 2019, the SF achieved financial and strategic outcomes for specific assets, while generating an overall return of 2.9%.”
  • For its commercial fund, Khazanah said it aims to generate a rate of return equivalent to the Malaysian consumer price index +3% on a five-year rolling basis.
  • For its strategic fund, Khazanah aims for a return of the equivalent of the yield from 10-year government securities on a five-year rolling basis and for an investment to achieve its strategic objectives.

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