Monday, June 18, 2012

MAS Jun 2012

The current Malaysian accounting system enables MAS to treat the junior sukuk as equity financing as it ranks below the claims of other present and future creditors but ahead of other common shareholders.

Hence the issuance will not impact its gearing ratio. MAS’s net gearing ratio stood at 5.9 times.

Market observes view the full subscription of MAS’s perpetual sukuk as it will able to shore up its capital base without deteriorating its net gearing ratio.

MAS is also expected to announce another round of rm5.3 billion fund raising for its aircraft leasing.

However there is still a long way to go for a MAS turnaround. Lingering issues that the airline still has to resolve include: Reducing its high operating costs, increasing its yield to be a par with peers, re attracting passengers and increasing load factors and maintaining its five star status with Skytrax.

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