Transmile future threatened

MALAYSIA’S Transmile Group, which operates the all-cargo airline Transmile Air Services, risks stock exchange delisting for failing to submit its promised regularisation plan.

Regulators will suspend the company with effect from 3 March and delist from 7 March if ongoing talks fail.

In a statement, the company said: “Upon the de-listing of the company, Transmile will continue to exist but as an unlisted entity. The company is still able to continue its operations and business and proceed with its corporate restructuring.”

The airline was served a winding up petition last June, the most serious action that can be taken against a company, for defaulting on its debt payments. It reported a net loss of RM135.1 million (US$44.1 million) in the third quarter of 2010, down from a net profit of RM15 million ($4.9 million) in the same quarter last year when it failed to find buyers for its widebody aircraft.

The Transmile Group was given until 22 February to submit its plan for restructuring its debt and stabilising its business to the to Securities Commission or Bursa Malaysia Securities. It now has until 2 March to appeal to Bursa.

Transmile managed to reduce its debt recently by selling four aircraft to FedEx. The four 20-year-old MD-11 freighters had been left idle since April 2008 and was costing Transmile up to RM1.18 million ($386,000) a year in parking, storage and maintenance costs.

The RM208.8 million ($68.2 million) sale price of the four freighters will be used partially to settle the outstanding debt of the company, which amounted to RM528.9 million ($172.8 million) at 30 September 2010.

The airline reported a net loss of RM135.1 million ($44.1 million) in the third quarter of 2010, down from a net profit of RM15 million ($4.9 million) in the same quarter 2009.