Malaysia Airlines Suspends Trading of Stocks Pending Privatisation of Air Carrier; Majority Investor Offers 27 Sen per Share
Malaysia Airline System suspended on Friday the trading of the company's shares on the Malaysian Stock Exchange as part of the restructuring plan of the air carrier that was financially hit by two air tragedies in March and July 2014.
The air carrier will be privatised. State-run Khazanah Nasional, which holds a 69.37 stake in the airline, is offering 27 sen per share for stocks it does not hold yet. That would amount to almost $470 million or 1.4 billion ringgit.
Khazanah will conduct a comprehensive review and restructuring of the air carrier, owner of the two Boeing 777 jets were involved in the two biggest air disasters this year. MH370, with 239 people on board, left Kuala Lumpur on March 8 bound for Beijing and mysteriously disappeared. It remains missing until now, but all passengers and crew are presumed dead.
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But prior to the two aviation tragedies, Malaysia Airlines was operating at a loss for the past three years. The air carrier said privatising the company would give it space to put in place appropriate capital structure to meet its substantial funding requirements in the next few years and at the same time keep running amid a high level of debt.
"It is easier to restructure if it's a private company ... They don't need to worry about making announcements and the timing of it," said Ang Kok Heng, chief investment officer of Phillip Capital Management, based in KL.
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The air carrier's shares have tumbled down 23 per cent in 2013, while analysts estimate it would lose over 1 billion ringgit as it deals with costs of the two tragedies and lesser passengers.
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