KUALA LUMPUR: The government will not be providing financial assistance or debt guarantees to Malaysia Airlines Bhd, said Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
Any support measures for the national airline would need to be addressed by Malaysia Airlines' sole shareholder Khazanah Nasional Bhd, and not the government, Tengku Zafrul stressed.
"We have consistently said this is a matter where Khazanah as a sole shareholder has to resolve. We at the Ministry of Finance (MoF) will not be injecting any cash or capital into Malaysia Airlines through Khazanah," he said on BFM Radio's Breakfast Grille programme yesterday.
Tengku Zafrul said the sovereign wealth fund would have to undertake its own corporate exercise to ensure the survival of the national carrier.
"We have no guarantees for Malaysia Airlines. Right now, we are not looking at any support from the government," he said when asked whether MoF would be giving any guarantee to the airline.
Tengku Zafrul reiterated that he had never ever said about closing down Malaysia Airlines.
His remarks followed reports that Malaysia Airlines' parent Malaysia Aviation Group had warned leasing companies that Khazanah would stop funding the group if restructuring talks with lessors were unsuccessful.
Malaysia Airlines confirmed last week that it had reached out to its lessors, creditors and key suppliers as it embarked on an extensive restructuring of its business and capital structure which include revising its Long-Term Business Plan unveiled in early 2019, to stay afloat.
Aviation experts said Khazanah would need to be the guarantor in facilitating the airline's restructuring.
"The debt exercise is up to Khazanah. If they (Khazanah) are not willing to do so, there is no way the creditors or lessors will agree to the restructuring," an industry expert told the New Straits Times.
Khazanah has said it would support the restructuring.
"If this effort proves unsuccessful, Khazanah will need to evaluate options going forward on how to maintain connectivity for Malaysia," a Khazanah spokesperson said late last week.
Meanwhile, Tengku Zafrul also fielded questions about loan moratorium, potential taxation measures, 2021 Budget and his political affiliation, besides Malaysia Airlines' predicament.
With the government's debt and contingent liabilities at the RM1.2 trillion mark, a situation worsened by lower contributions from petroleum taxes and dividends, he said the ministry would be looking at how to increase government revenue.
Although the reintroduction of Goods and Services Tax and inheritance tax were not completely dismissed, Tengku Zafrul said the focus would be on optimising the current tax structures.
This also means reducing leakages, disincentivising the shadow economy and improving collection.
The contraband cigarette industry was singled out as a problem area, which requires involvement by enforcement agencies.
On broadening the tax base, he said timing was important, alluding that the current economic conditions were not conducive to new taxes.
With regards to the end of the loan moratorium period, he said banks should not impose more onerous conditions on borrowers, as it went against the spirit of government recovery measures.
On his political career, Tengku Zafrul said he was not interested in joining any political party.
"The focus today, and why I am here (at the ministry), is to help stimulate the economy towards a path of recovery," he said.