New Delhi: There is no hurry for Malaysia Airlines (MAS) to launch the third tranche of its Sukuk program as there is no requirement of funding to the airline for now, Chairman Tan Sri Md Nor Yusof said this.
He said that Malaysia Airlines (MAS) is in no rush to issue the third tranche of its sukuk program.
“We don’t need the funding for now,” he said during the visit of International Trade and Industry Minister Datuk Seri Mustapa Mohamed to MAS-GMR Aerospace Engineering Company Ltd.’s maintenance, repair and overhaul facility in Hyderabad, India.
He expressed content over the funding as the recovery plans are in place already and going on well.
“We will do it when the need arises,” he said while answering when MAS would issue its next sukuk.
MAS has put in place a RM2.5 billion Perpetual Junior Sukuk Program and the first tranche of the RM1.0 billion sukuk was fully subscribed by Retirement Fund Incorporated.
The sukuk, which is the first pillar of the airline’s funding plan to shore up its capital base, was arranged by Maybank Investment Bank Bhd.
Meanwhile, Group Chief Executive Officer, Ahmad Jauhari Yahya, said that the group has also obtained firm commitment for the remaining RM1.5 billion.
MAS issued the second tranche of the Junior Sukuk amounting to RM500 million on September 18, 2012.
It was issued at par and carried a semi-annual profit rate of 6.90 percent per annum up to the tenth year.
If MAS does not exercise its option to redeem at the end of the tenth year, the periodic distribution will increase by 2.5 percent.
The proceeds raised from the issue will be utilized by the airline as working capital and to refinance existing borrowings.