They are taking money from shareholder.
That why u drop KAU KAU..........
Now is 83 cents, abt 17% drop in 1 day.
MAS rights issue after returning to the black
Business & Markets 2012
Written by Isabelle Francis of theedgemalaysia.com
Wednesday, 28 November 2012 09:28
PETALING JAYA: MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) is proposing a rights issue exercise to raise some RM3.1 billion for capital expenditure and working capital after returning to the black with a net profit of RM37.51 million in the third quarter ended Sept 30 — its first after six straight quarters of losses.
MAS group CEO Ahmad Jauhari Yahya said in a statement yesterday the airline intends to undertake the proposed capital restructuring exercise that will reduce its par value of RM1 to 10 sen to facilitate the rights issue exercise. The reduction of 90 sen in par value will give rise to a credit reserve of up to RM8 billion which will be utilised to reduce the accumulated losses of MAS that stood at RM8.19 billion as at Sept 30, 2012.
“The proposed rights issue, which is the fourth pillar in the long-term financing plan we announced earlier this year, will provide MAS with improved liquidity and financial flexibility, crucial to allowing us to execute our financing plans in the near term,” said Ahmad Jauhari.
The exercise is expected to be completed by the second quarter next year.
Altogether, MAS has a capex requirement of RM9 billion, of which RM5.3 billion is being provided for by Turus Pesawat Sdn Bhd, a special purpose vehicle owned by the Ministry of Finance Inc that raised funds from the bond market.
Another RM2.5 billion is from MAS’ issuance of perpetual sukuk bonds and the remainder from bank loans.
MAS said while the basis of entitlement and the rights issue price have not been fixed, its major shareholder Khazanah Nasional Bhd, which holds 69% in the airline, has given its irrevocable and unconditional undertaking to subscribe for its full entitlement for the exercise.
Analysts feel that part of the proceeds will be used to redeem the perpetual sukuk, which carries a costly coupon rate of 6.9% per annum.
MAS posted a higher-than-expected net profit of RM37.51 million in the third quarter ended Sept 30, 2012 versus a net loss of RM477.01 million a year ago. Revenue was 4% lower at RM3.34 billion versus RM3.48 billion a year ago on the back of traffic reduction of 9% and capacity cut by 7%.
During the quarter under review, yield was up 3% at 26.1 sen while revenue per available seat km (RASK) increased by 1% to 19.5 sen.
Despite intense competition and sluggish markets, particularly in Europe, RASK was up marginally by 1% as a result of improved yield management and pricing segmentation. Yields improved 3% in the third quarter of 2012 quarter-on-quarter.
The airline said the decrease in operating expenditure was due to lower non-fuel cost by 9% or RM519.3 million and a lower fuel cost by RM336 million or 9% over the same quarter last year in which average fuel cost has decreased from US$137 (RM418) per barrel to US$131 per barrel.
Also noteworthy is that this is the second consecutive quarter MAS saw positive operating cash flow. For the third quarter, it saw RM263.9 million operating cash flow versus RM32.4 million in the preceding quarter.
For the nine months ended Sept 30, 2012, MAS narrowed its losses to RM482.55 million from RM1.24 billion a year ago. Revenue dropped 4% to RM9.62 billion from RM10.04 billion.
As at September, the airline’s cash pile stood at RM1.41 billion from RM968.5 million a year ago after a series of fund raising exercises, which included the issuance of RM1.5 billion of perpetual sukuk that was subscribed by Kumpulan Wang Persaraan.
In a separate statement, MAS said yesterday it has decided to buy back 10 used B737-400 aircraft from individual lessors who have separate trust agreements and aircraft head lease agreements with Bank of Utah for some US$64 million or US$6.4 million each.
This article first appeared in The Edge Financial Daily, on Nov 28, 2012.
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