Malaysia Airlines Will Be Privately Owned. What You Need To Know

The national carrier's shares will be delisted from the stock market.

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National Carrier Malaysia Airlines Has Announced That It Will Be Taken Over By State-owned Investor Khazanah Nasional

The national carrier will be taken over privately by Khazanah Nasional.

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Malaysian Airline System Bhd. will be delisted after sovereign wealth fund Khazanah Nasional Bhd. offered to buy out minority shareholders in a restructuring plan for the national carrier that suffered two disasters this year.

Malaysia Airlines' (MAS) largest shareholder, Khazanah Nasional Bhd plans to de-list the ailing national carrier under its restructuring plan which will see it paying out a total of RM1.38bil.

Khazanah Will Offer Malaysia Airlines 27 Sen Per Share That It Doesn't Own, Amounting To Rm1.4 Billion In Total

Khazanah will offer Malaysia Airlines 27 sen per share.

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Malaysian Airline System Bhd (MAS) said today that state investor Khazanah Nasional will offer 27 sen for each share in the company it does not own, amounting to nearly RM1.4 billion to take the troubled airline private.

If the proposal takes shape, it will create a transaction worth almost RM1.38 billion. Khazanah will also acquire the shares that is doesn’t own in MAS at 27 sen per share.

The State Investment Unit Will Be Restructuring The Airline Due To Poor Financial Performances And The Two Plane Incidents That Happened Earlier This Year

Due to poor performances, Khazanah will be restructuring the company soon.

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Khazanah, which owns 69.37% 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 delist 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.

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.

"Only Through A Complete Overhaul Of The Company Can We Deliver A Genuinely Strong And Sustainable National Carrier," Prime Minister Najib Razak Said.

"Only through a complete overhaul of the company can we deliver a genuinely strong and sustainable national carrier."

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Today, the Government of Malaysia, through its strategic investment fund Khazanah Nasional Berhad (Khazanah), announced a formal process to take full ownership and de-list Malaysian Airline System Berhad (MAS). This is the first step needed to return our national carrier to profitability. It is a step I wholeheartedly support. MAS is part of Malaysia’s history. It is a symbol of national pride, of our ambitions and our place in the world. It is more than just a company to us. So today we are making changes to ensure it is also part of Malaysia’s future story. Like all Malaysians, I am deeply saddened by the losses of MH370 and MH17. Seldom before has a company been subjected to two profound and extraordinary tragedies in such a short space of time. We pay tribute to the victims; we pray for their families; and we thank all those around the world for their support and their prayers in these difficult times.

We hope these twin tragedies will change the way the aviation industry operates, making global travel safer for all. But we must also acknowledge that they will change the way MAS operates, too.

We believe our national carrier must be renewed. This means wholesale change, to deliver a wholly different outcome. Only through a complete overhaul of the company can we deliver a genuinely strong and sustainable national carrier. Piecemeal changes will not work. This process of renewal will involve painful steps and sacrifices from all parties. My instruction and my commitment to all concerned is that the process will be carried out professionally, with proper principles of fairness, transparency and compassion. It is therefore critical that all parties close ranks and work closely together. Without the full support of all parties – management, employees, unions, creditors and vendors – as well as loyal passengers and the Malaysian people – this restructuring will not succeed.

The Government and Khazanah are in the final stages of completing a comprehensive and holistic restructuring plan. With due process and following the relevant approvals, we expect that a detailed plan will be announced before the end of August. MAS is our national carrier, and our national pride. The changes that start today will lay the foundations for its future success. I ask that all Malaysians continue to support Malaysia Airlines, as we build a stronger and more sustainable national carrier.

As A Result Of The Restructuring, Malaysia Airlines Will Suspend Trading Shares From Today Onwards

The airlines will be suspending shares from today onwards.

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Malaysia Airlines (MAS) plans to suspend its shares from trading today, two sources familiar with the situation said, likely paving the way for state investor Khazanah Nasional to take the airline private as a first step in a major restructuring.

Malaysia Airline System (MAS) shares were suspended today and its 69% stake holder, sovereign fund Khazanah Nasional said that it was undertaking a corporate restructuring plan for the company.

Delisting The Company Is The First Step Of Restructuring, With The Full Transfer Of Ownership To Be Completed Within 6 To 12 Months

It will take 6 to 12 months to fully be restructured.

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Khazanah said its proposed "complete overhaul" of MAS would take 6 to 12 months after approval from shareholders. It said the offer to take MAS private is the first stage of the restructuring scheme, and 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.

"Upon successful completion of the proposed SCR, Khazanah will become the sole ordinary shareholder of MAS, which would lead to a de-listing of MAS," said the government investment fund.

A de-listing would pave the way for Khazanah, which is chaired by Prime Minister Najib Razak, to revive the ailing carrier, possibly by selling off its profitable engineering, airport services or budget airline units, trimming its payroll and installing a new management team.

Read Also: What Happens Now For Malaysia Airlines? Here's What Analysts Say

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