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Malaysia Airlines sells off property as part of restructure

KUALA LUMPUR - Malaysia Airlines plans to sell off property, including a piece of freehold land and a building which it currently operates from, to the government’s pension fund.

The sale, worth 145 million ringgit (41.4 million dollars), to the Employees Provident Fund (EPF) is part of the airline’s restructuring plan, the carrier said late Friday in a statement to Malaysia’s bourse.

Malaysia Airlines said the sale of the land and the building known as MAS Academy ‘forms part of our strategic asset rationalisation exercise by the disposal of non-core assets as an initiative in the business turnaround plan of the company.’

The airline will lease back the building from the EPF for five years, with an option to renew the lease period for a further five years.

Last year, the loss-making national carrier disposed of its headquarters and other buildings as part of the restructuring exercise, which has also seen it axing unprofitable air routes.

It posted a smaller than expected net loss of 136.4 million ringgit for 2006 after embarking on the turnaround plan a year ago, following massive losses of 1.14 billion ringgit for 2005.

Malaysia Airlines has forecast a net profit of between 50.0 million and 90.0 million ringgit for 2007.