Khazanah Nasional Bhd, which owns 69.4% of Malaysian Airline System Bhd (MAS), has proposed to take the national carrier private with an offer of 27 sen per share.
MAS stock closed at 24 sen yesterday before being suspended this morning.
The announcement by Khazanah today looks like a pre-emptive move to contain negative sentiment on MAS stock ahead of its second quarter results to be released in a fortnight – scheduled for Aug 22.
MAS is expected to report drastically worse losses for the quarter due to knee-jerk reactions on bookings after Flight MH370 disappeared on March 8.
That Boeing 777 with 239 on board, including 15 crew, is believed to have sunk somewhere in the southern Indian Ocean, close to Antarctica, and search efforts are still going on five months later to resolve what has become one major aviation mystery.
The impact of Flight MH17, shot down over Ukraine on July 17, will not be included in the upcoming results announcement – which covers the three months ended June 30, 2014.
But MAS is likely to provide an indication of the second tragedy’s impact on its earnings for the month of July too with its second quarter results.
In today’s statement, Khazanah said it had submitted a formal request to the MAS board of directors to undertake a selective capital reduction and repayment exercise.
Based on the 27 sen per MAS share offer, the exercise could cost Khazanah about RM1.4 billion.
Upon completion of this exercise, Khazanah said it will become the sole shareholder in MAS, which would lead to a delisting of MAS.
“Today’s proposal for delisting represents the first stage of the restructuring scheme.
“Khazanah is in the final stages of completing the overall restructuring proposal, and upon due process and approvals from the relevant authorities, regulators and the special shareholder, the Minister of Finance Incorporated, we envisage that additional detailed plans will be announced by the end of this month.
“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 the review will cover the airline’s operations, business model, finances, human capital and regulatory environment.
“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.”
Article taken from TheRakyatPost