Malaysia Airlines raises funds with $785m bond

Malaysia Airlines says its 2.5 billion ringgit (US$785 million) Islamic bond has been fully sold, allowing it to tap a new source of funds as it tries to recover from losses.

Chief Executive Ahmad Jauhari Yahya says Retirement Fund Inc., which is a state pension fund, has bought 1 billion ringgit ($314 million) of the bonds.

He says the airline has commitments for the remaining 1.5 billion ringgit ($471 million) from local institutions, which it expects to drawdown later this year.

He said Tuesday the Islamic bond was the bedrock of the airline's funding plan, that also includes leasing new aircraft rather than buying them to cut costs.

The carrier suffered a hefty 2.52 billion ringgit ($791 million) loss last year.