by BLOOMBERG / pic by TMR FILE

SINGAPORE • Malaysia Airlines Bhd (MAB) is seeking to defer interest and lease payments, as it tries to mitigate the impact of the coronavirus pandemic, people familiar with the matter said.

The flag carrier is talking to banks and leasing companies on the matter, they said, asking not to be identified, as the matter is private.

The lease payments under discussion amount to about RM1 billion, one of the people said.

The company already issued notices of deferral for distribution payments due Sept 30 on sukuk, according to facility agent CIMB Investment Bank Bhd in a statement on Bank Negara Malaysia’s website.

The securities involved are RM1.5 billion nominal value of perpetual sukuk and payment will be deferred to the next distribution date March 31, 2021.

The pandemic has devastated the global travel industry, forcing airlines to suspend flights, lay off employees and seek financial help from governments and investors.

Companies such as Virgin Australia Holdings Ltd and Avianca Holdings SA, Latin America’s second-largest airline, have gone into administration or sought bankruptcy protection.

MAB has been struggling to turn around since it was taken private by Khazanah Nasional Bhd in 2014.

The country is also grappling with containing the coronavirus, reporting its highest daily increase in virus cases since June earlier this month.

MAB’s discussions with the bankers and leasing companies are still ongoing and there is no certainty that the parties will agree to the requests, the people said.

The company is also seeking to convert fuel hedges totalling about RM500 million into debt, according to the people.

There was no immediate reply from MAB to an emailed request for comment and calls to the company’s public relations office went unanswered.