Khazanah seeks full ownership of Malaysia Airlines

In a much anticipated move to turn around ailing Malaysia Airlines (MAS), Khazanah Nasional is now seeking full ownership of the airline with an offer to purchase the remaining 30.6 per cent stake it does not already own, which would lead to MAS’ effective delisting.

The state investment fund's offer of RM0.27 (US$0.08) represents a 12.5 per cent premium to the closing price on Thursday. Earlier today, trading of MAS’ shares was suspended pending the announcement.

Khazanah underscored the need for all parties to work on a complete overhaul of the carrier, noting that "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."

The buyout of the shares will cost Khazanah Nasional RM1.4 billion and when successful, will fully privatise the national carrier, which has in the last four months suffered huge fallout from MH370’s baffling disappearance and the downing of MH17 over Ukrainian airspace.

MAS sustained massive financial losses in recent years and is saddled with a largely unprofitable network and over-sized work force. Past attempts to right-size its workforce were met by strong opposition from Malaysia’s workers' unions.

Once privatised, various options are open to Khazanah, including structural reforms, trimming of network, fleet and workforce, and re-branding.

-TTG Asia.