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Julian Bray writes: As I predicted, Malaysian Airline System is now the subject of a full scale damage limitation exercise. Malaysian Airlines share trading has today been suspended and the public company will be delisted, taken private, but in effect to be nationalised, and taken into the Government portfolio of investments - they already hold 69 per cent of the issued share capital. The cost will be around £255 million.
Existing shareholders are being offered a modest premium for their shareholdings in this, serial loss making airline, and as there is no other way of recovering their existing investment, the offer - the only one on the table - will be fully taken up.
The airline having now lost two aircraft; one to a missile strike (or now possibly an air -to-air attack) the other somewhere over the oceans or possibly landed at a disused wartime airstrip in Cambodia.
Both these serious events resulted in catastrophic loss of life, and a class action of lawsuits in preparation, have put secretive Malaysia under the continuing world critical media spotlight and in the process left Australia with the lions share of the recovery bill for one of the still missing aircraft.
The shot down Boeing still has to properly examined, a position now very marginal as it is in the heart of a conflict zone. No one is saying if this latest move, is designed to frustrate any future legal claims, as it would be a simple matter, having acquired the entire share capital to dissolve and liquidate the old company, and in an arms length process rebuild a new debt and legal action free nationalised aviation organisation.
So lawyers acting for families of the victims will have to put their claims into top gear, the class action legal claims clearly need to finalised and lodged without delay. A difficult task as there are still no official reports on the outcome of the two parallel deeply frustrated and compromised investigations to rely on. As part of the process formal press notices have been issued as recorded below:
MEDIA STATEMENT Kuala Lumpur, 8 August 2014
Khazanah Proposes to De-list Malaysian Airline System Berhad
Khazanah Nasional Berhad (“Khazanah”) has today submitted a formal request to the Board of Directors of Malaysian Airline System Berhad (“MAS”) to undertake a selective capital reduction and repayment exercise (“Proposed SCR”) of MAS’ ordinary shares.
The proposal will enable minority ordinary shareholders of MAS to receive a capital repayment amount of RM0.27 per ordinary share. This represents a 12.5% premium to closing price on 7 August 2014 and a 29.2% premium to the 3-month volume weighted average market price (“VWAMP”).
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.
In June 2014, Khazanah had announced that it was in the midst of undertaking a comprehensive review of MAS, in consultation with the Special Shareholder, the Minister of Finance Incorporated.
Khazanah further clarified that subject to the necessary approvals from the relevant authorities, it would announce the proposed restructuring scheme within a period of 6 to 12 months.
We reiterate that the proposed restructuring will critically require all parties to work closely together to undertake what will be a complete overhaul of the national carrier on all relevant aspects of, inter alia, the airline’s operations, business model, finances, human capital and regulatory environment.
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.
In this regard, today’s proposal for de-listing represents the first stage of the restructuring scheme. Further, Khazanah is in the final stages of completing the overall restructuring proposal, and upon due process and approvals from the relevant authorities, regulators and the Special Shareholder, the Minister of Finance Incorporated, we envisage that additional detailed plans will be announced by the end of this month.
End
For further information on Khazanah, please visit www.khazanah.com.my or contact Mohd Raslan Md Sharif at +603 2034 0000, or e-mail at raslan.sharif@khazanah.com.my.
About Khazanah Nasional Berhad Khazanah is the strategic investment fund of the Government of Malaysia entrusted to hold and manage the commercial assets of the Government and to undertake strategic investments.
Khazanah is involved in various sectors such as power, telecommunications, banking, healthcare, airport management, infrastructure, leisure & tourism, property development, broadcasting, investment holding, and technology.
Some of the key listed companies in Khazanah’s investment portfolio include Telekom Malaysia Bhd., Tenaga Nasional Bhd., CIMB Group, Axiata Group Bhd., IHH Healthcare Bhd., Malaysia Airports Holdings Bhd., and UEM Sunrise Bhd.
JULIAN BRAY, Journalist, Broadcaster, Aviation Security &Ops,Travel/Cruise Industry Expert, EQUITY, NUJ UK Tel: 01733 345581 (HOME ISDN NEW NUMBER 01733 345020) e&oe
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