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24 December, 2008

MAHB's plans upgrading works at LCCT in Sepang

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) has received the Government's nod on its long-delayed financial restructuring plan.

Under the plan, MAHB will pay the Government RM1.01bil, of which RM508mil will be in cash and the rest will be set off against capital expenditure that includes upgrading works at the Low Cost Carrier Terminal (LCCT) and aero-train at the KL International Airport (KLIA) in Sepang.

The airport operator said the approved restructuring plan would also pave the way for it to expand operations at KLIA on its own, including building a new passenger terminal as part of its a strategy to make the country's main gateway "a successful and leading regional hub for both full service and low-cost carriers."

The restructuring plan also includes the sale of the Sepang International Circuit, the venue of the Formula 1 Grand Prix race, to the Government.

"With all this in place, we can now focus on our core business - airport operations," MAHB managing director Datuk Seri Bashir Ahmad said in a statement to Bursa Malaysia.

He said the financial restructuring would also establish the framework for the review of aeronautical charges. "We will now be able to soon announce an enhanced incentive scheme for all airlines operating in Malaysia, which we held back pending our restructuring plan," Bashir said.

Bashir described the financial restructuring as an "amicable arrangement" that addressed MAHB's existing financial obligation to the Government and its social obligations in developing and running airports. It also provides "an acceptable revenue sharing mechanism."

MAHB operates all airports and airfields in the country except the one in Senai, Johor. It also has operations in Kazakhstan, India and Turkey.

Bashir said prior to the restructuring, MAHB had already improved its profitability and increased its cash pile to more than RM600mil. it had also revamped its management structure and set key performance indicators for senior managers, as well as expanded overseas.

"The Government's approval will set the stage for MAHB's new direction and business philosophy going forward, which we hope to unveil before the end of the first quarter of 2009," he said.

MAHB shares closed four sen lower at RM2.19 yesterday, extending this year's decline to 27.5%. MAHB's announcement came after trading hours yesterday.

This article is a verbatim copy of the original article from The Star.