Khazanah to pay RM1.4bil to take MAS private; 6 to 12 months for restructuring

Khazanah, which owns 69.37 percent of MAS, will undertake a comprehensive review and restructuring of the airline, which has suffered two jetliner disasters this year, MAS said in a statement after announcing the suspension of its shares.

KUALA LUMPUR: Malaysian Airline System Bhd (MAS) said on Friday that state investor Khazanah Nasional will offer 27 sen for each share in the company it does not own, amounting to nearly 1.4 billion ringgit ($435 million) to take the troubled airline private.

Khazanah, which owns 69.37 percent of MAS, will undertake a comprehensive review and restructuring of the airline, which has suffered two jetliner disasters this year, MAS said in a statement after announcing the suspension of its shares.

The move to de-list MAS from the Malaysian stock exchange is due to the airline's unfavourable financial performance, having recorded a net loss for the past three years, it said.

Private ownership will allow room for Khazanah to introduce an appropriate capital structure for MAS to meet its "substantial funding requirements" in the next few years, and to sustain operations amid a high level of debt, the state.

Khazanah said in a statement that its proposed "complete overhaul" of Malaysia Airlines (MAS) will take six to 12 months after it has secured approval from shareholders.

A Malaysian Airlines flag flies in front of the traffic control tower at Kuala Lumpur International Airport in Sepang

Khazanah said its nearly 1.4 billion ringgit offer to take MAS private, announced on Friday, is the first stage of the restructuring scheme. Its full proposal will be announced by the end of the month.

Khazanah said it will need cooperation from all parties to undertake the restructuring, covering the airline's operations, business model, finances, staff and the regulatory environment.

"Nothing less will be required in order to revive our national airline to be profitable as a commercial entity, and to service its function as a critical national development entity," it said. - Reuters