MAHB ... Nov12

It needs to raise more cash to finance KLIA2, the new LCCAT that is now estimated to cost between rm3.6 billion and rm3.9 billion.

 

MAHB is expected to issue sukuk amounting to rm1 billion to rm1.5 billion for the purpose. It will be MAHB's second largest sukuk issuance after its restructuring exercise in 2009, when the company raised rm2.5 billion.

 

Of that amount, rm2 billion was allocated for the development of KLIA2 while the remaining rm500 mikllion was paid to the government as consideration for the restructuring.

 

However, it has been found that the rm2 billion is not sufficient to complete KLIA2 because it is 70% bigger than planned. With six months from Nov 2012 to go to complete KLIAw, MAHB has to finish the job.

 

With the new paper, MAHB would have issued sukuk of up to rm3.5 billion for KLIA2.

Although KLIA2 project is loss making on a net income level for the first three years, it will be cash flow positive from its first year of operations. This should ally fears of a cash flow drain on the parent because the KLIA2 project would be self funding.

 

KLIA2 will definitely be a game changer for MAHB, which operates and manages 39 airports in Malaysia . The company has also four foreign airports in its portfolio.