Top
Begin typing your search above and press return to search.
Madhyamam
    keyboard_arrow_down
    Login
    exit_to_app
    exit_to_app
    Homechevron_rightBusinesschevron_rightMalaysia Airlines set...

    Malaysia Airlines set for complete overhaul

    text_fields
    bookmark_border
    Malaysia Airlines set for complete overhaul
    cancel

    Malaysia's state investment firm Khazanah Nasional has proposed a "complete overhaul" of the troubled national carrier Malaysia Airlines.

    Khazanah wants to buy the shares it does not already own in Malaysia Airlines and delist the carrier. The airline has been hurt by two major tragedies in recent months, the crash of flight MH17 in Ukraine and disappearance of flight MH370. The two incidents have triggered concerns about the airline's future.

    Khazanah, which currently owns 69.4% of the airline, has offered to pay 0.27 ringgit per share for the remaining stock, a 12.5% premium to the closing price on Thursday. Trading in shares in Malaysia Airlines was suspended on Friday, ahead of the announcement.

    The airlines' flight MH370 went missing on 8 March while flying from Kuala Lumpur to Beijing, leading to a massive search and rescue operation that is still continuing and may cost millions of dollars. The majority of the passengers on board that flight were from China. The crisis led to a high number of cancellations and reputational damage to the carrier, including a 60% drop in sales from China. The carrier suffered another major setback in July after all 298 people on board flight MH17 died as the plane was brought down in eastern Ukraine, close to the border with Russia.

    The company has been losing money for many years and its market value has fallen by more than 40% in the past nine months. In May, it reported that its net loss widened by 59% to 443m ringgit ($138m; £82m) in the January-to-March period. That marked that the fifth straight quarter of losses for the airline.

    Khazanah, which has invested more than $1bn into the airline in recent years, had previously indicated that a major restructuring was on the cards. On Friday, the state fund said it would look at restructuring all aspects of the airline's operations including its business model, finances and human capital.

    "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 fund said in a statement.

    Show Full Article
    TAGS:
    Next Story