Khazanah Nasional Bhd is planning to delist Malaysia Airline System Bhd (MAS) after buying out all the shares in the airline it doesn’t already own, in the first phase to restructure the ailing national carrier.
The Federal Government’s investment arm will pay out 27 sen per share to buy out MAS – for a total of RM1.38 billion – to take full control of the airline, Khazanah said in a statement today. That price is a 12.5% premium over yesterday’s closing price of 24 sen for MAS shares.
“We reiterate that the proposed restructuring will critically require all parties to work closely together to undertake what will be a complete overhaul of the national carrier on all relevant aspects,” Khazanah said, as reported by The Malay Mail Online.
“Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity.”
In effect, the buyout will move MAS back under full proxy control of the Malaysian Government.
On top poor quarterly performance that has cost the airline RM4.13 billion in losses over the past three years, caused partly by what many analysts say is mismanagement, MAS was hit twice this year with tragedy involving its fleet – first with the disappearance of Flight MH370, and more recently with the shooting down of Flight MH17 over eastern Ukraine.
This year alone, Bloomberg estimates that MAS will probably lose more than RM1 billion as it grapples with rising costs and the loss of confidence among travellers. MAS shares have dropped 23% in value this year, up until today’s request for a suspension in trading.
