Finance Minister Tengku Zafrul Tengku Abdul Aziz has denied any claims that sovereign wealth fund Khazanah Nasional Bhd will be funding Malaysia Airlines Bhd (MAB) with RM5 bil to recover from the Covid-19 pandemic.
The minister, who is also a member of Khazanah’s board of directors, noted at a press conference as per The Star that Khazanah has not approved any such commitment.
“As a board member, this is the first time I’ve heard of this report,” said the minister, adding that it is up to Khazanah if they wish to do so.
“As far as I know, the Finance Ministry has not given any allocation to MAB,” said the minister, in response to a report from Bloomberg that Khazanah was considering providing MAS up to RM5 bil to aid it through the Covid-19 crisis, citing sources. MAB has also denied the report.
The carrier noted that it was currently shifting its long-term business plan to match the changing aviation landscape, and that it was continuing discussions with Khazanah on the level of support needed moving forward.
The minister also stated that the Ministry of Finance will not be injecting any funds into the aviation industry, adding that the government also had no plans to borrow or issue foreign currency bonds to fund the stimulus and recovery packages announced due to the Covid-19 pandemic, noting that “the liquidity in the country is sufficient.”
“For the short-term recovery plan or Penjana, the fiscal injection was about RM10 bil and it’s derived from local currencies borrowing. Given the liquidity today in Malaysia for ringgit, especially, we see no reason why we should tap on foreign borrowing, although we can and we have limited it. Our limit is RM35 bil, and as of now, the amount of foreign exposure is about RM30 bil, so we still have 15% capacity to borrow,” he said.
He also clarified that the country’s fiscal injection so far for the recovery and stimulus packages was about RM45 bil, and that there had been a need to borrow RM35 bil.
“We have enough to borrow in the market, now the borrowing is cheaper, so we are able to tap the market,” he said. – June 12, 2020
