MAS privatisation will cost Khazanah RM1.18bil

KUALA LUMPUR: The possible privatisation of Malaysia Airlines would cost its principal shareholder, Khazanah Nasional Bhd, RM1.18bil, assuming a 10% premium on its current share price, said Maybank Investment Bank (Maybank IB). 

"Further assuming that the profitable businesses are spun-off and separately listed with Khazanah ceeding a 30% stake, Khazanah would get back RM1.25bil cash," the investment bank said in a note on Wednesday. 

The research firm said MAS' share price had reached the bottom and it upgraded its rating to 'hold' from 'sell' with a target price of 22 sen per share. 

As at 11.50 am, MAS' share price was flat at 21 sen with 7.441 million lots changing hands. 

Maybank IB said the issue of flight MH370 would contribute negatively towards MAS financials but it firmly believed that by 2015, the parent airline would perform better thanks to its fleet rejuvenation and the benefits of cost cuts. 

"Based on this outlook, it is ideal to privatise MAS in 2014, perform the necessary restructuring ahead of the multiple listings in 2015," said Maybank IB.