Khazanah Nasional Bhd said there has been progress on all fronts towards the complete overhaul of Malaysia Airlines (MAS), under the five-year 12-point MAS Recovery Plan (MRP) announced on Aug 29.

Khazanah in a statement today, issued its first progress update on the MRP.

The government investment arm said it would continue providing quarterly updates to inform all stakeholders, especially the public, on the progress of the restructuring.

"The restructuring of MAS is well on track, with several major milestones reached and several more expected in the next quarter, particularly by year-end," Managing Director, Tan Sri Azman Mokhtar said.

Khazanah said overall progress has been made across the MRP's four main areas of, governance and financial framework, operating business model, leadership and human capital and regulatory and enabling environment.

It highlighted that among others, the MAS Restructuring Management Office with close to 50 personnel is now in full operations.

So far, 29 meeting sessions have been held with MAS employees to garner feedback and update them on the various restructuring initiatives.

This is complemented by a broader outreach effort, called cascade sessions, conducted by the MAS management. A total of 171 sessions have been held.

On the proposed delisting, Khazanah said MAS minority shareholders had approved the proposal for a selective capital reduction and repayment exercise (SCR) at the recent Extraordinary General Meeting.

"The SCR is expected to be completed by Dec 3, 2014, pending approval from the High Court," it said.

The delisting is one of the conditions for the MRP's total restructuring and investment capital funding of RM6.0 billion.

With the delisting, the first tranche of Khazanah's conditional capital injection amounting to RM2.0 billion, will be disbursed for the repayment to minority shareholders, as well as for working capital and restructuring expenditure.

Khazanah said the company to replace MAS, Malaysia Airlines Bhd, was incorporated on Nov 7 and is targeted to be operational by July 1, 2015.

The Malaysian Airline System Bhd (Administration) Bill 2014, was tabled and passed by the Dewan Rakyat on Nov 27.

The Bill is expected to be tabled in the Dewan Negara during its upcoming session in December 2014.

Khazanah expects to make a key announcement on the leadership of the Malaysia Airlines Bhd by year-end.

It also said that a talent assessment process at MAS to identify the workforce required by the Malaysia Airlines Bhd, estimated at 14,000 employees, is currently underway.

In the meantime, the framework for the proposed Corporate Reskilling Centre and Outplacement Centre, has been developed and is targeted for launch by April 1, 2015.

According to Khazanah, the Terms of Reference of the Employee Consultative Panel (ECP) has also been formulated.

The ECP will convene its first meeting in early December 2014.

A comprehensive review of all contracts, currently totaling 5,000, is underway.

Priority is being given to contracts that can potentially provide significant opportunity for cost reduction and efficiency gains.

In addition, revised guidelines for entering into new contracts and contract renewals are in place, while preparations are being made to revise the limit of authorities for contract awards.

Khazanah said the terms of reference of the Governance and Ethics Committee (GEC) have been formulated.

It is targeted to be operational upon the completion of the delisting of MAS and will have a finite life of between three and five years.

The movement of staff from Subang to Kuala Lumpur International Airport (KLIA) is scheduled to begin in the second quarter of 2015.

The move had initially been planned to start this year, but was deferred to ensure that MAS employees who will not be migrating to Malaysia Airlines Bhd, would not be burdened unnecessarily by having to relocate to the KLIA area.

Meanwhile, renovation work at the Support Facility Building and renovation planning of engineering hangars at KLIA have commenced. Land for the development of Malaysia Airlines Bhd's headquarters has been identified.

Khazanah has been approached by many individuals with relevant expertise and experience who voluntarily want to be part of the restructuring.

Thus far, numerous CVs (curriculum vitae) have been received and the applications reviewed, with several set to join the restructuring effort.

Khazanah has also received no less than 28 business proposals expressing interest in participating in or complementing the MRP.

"We wish to state that as required by Khazanah's operating processes and procedures, only credible proposals are evaluated and assessed," it said.