Malaysia Airlines to delist for “complete overhaul”
Malaysia's state investment company Khazanah Nasional said the state takeover will represent the first stage of a "complete overhaul" of the loss-making airline and that detailed plans will be announced by the end of this month.
August 9, 2014
By Donald Urquhart
Malaysia’s state investment company said Friday it plans to make Malaysia Airlines fully government owned by delisting it from the country’s stock exchange in order to undertake a major overhaul of the beleaguered carrier.
Currently estimated to be bleeding $2 million a day after two major disasters – the disappearance of MH370 and the shoot down of MH17 – this year added to its longstanding financial problems. Malaysia Airlines hasn’t been profitable for the past three years. The Malaysian government has injected more than five billion ringgit ($1.68 billion) over the past decade just to keep the airline flying, even before the devastating blows of the two tragedies.
Khazanah Nasional, which owns 69 per cent of Malaysia Airlines, has proposed to the carrier’s board that it buy out minority shareholders at 27 sen (US8 cents) a share, which is 29 per cent higher than the airline’s average share price over the previous three months. The takeover would cost 1.38 billion ringgit (US$429 million). Khazanah said the state takeover will represent the first stage of a “complete overhaul” of the loss-making airline and that detailed plans will be announced by the end of this month.
“The proposed restructuring will critically require all parties to work closely together,” Khazanah said in a statement. “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.”