Khazanah Nasional Bhd, the Malaysian government’s investment arm, which owns more than 69% of Malaysian Airline System Berhad, has proposed that it delists the carrier, taking it under the control of the state.
On Friday, Khazanah announced that it had submitted a formal request to the Board of Directors of Malaysia Airlines in which it planned to pay minority ordinary shareholders RM0.27 per ordinary share following which it would become the sole shareholder.
If Khazanah gets the necessary approvals, it says it will announce a proposed restructuring scheme six to twelve months later. It says the delisting proposal represents the first stage of the restructuring scheme.
In a statement, the organisation says: “We reiterate that the proposed restructuring will critically require all parties to work closely together to undertake what will become 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 response, Malaysia Airlines issued a statement that reads: “We have received notice of Khazanah’s intentions to take full ownership and delist Malaysia Airlines. Our Board of Directors will be deliberating this proposal and an official response from the company will be issued later. During this period our business operations remain unchanged.”
While the recent tragedies involving Malaysia Airlines’ aircraft have worsened the financial standing of the airline, it has reported losses for the past three years, according to Reuters. In June, Khazanah had already announced that it was in the midst of undertaking a comprehensive review of the airline.
Linden Birns, md of Plane Talking, says one positive thing that comes from a crisis is that it is an opportunity for the heads of a company to demonstrate their ability to lead and make fundamental changes. “This is not a time to panic, it is a golden opportunity [for Malaysia Airlines] to show their leadership quality. The need to show that they are not just saying the right things but are walking the talk,” he adds.
