MAS to be de-listed in $429 million buyout

Malaysian Airline System (MAS) will be de-listed after sovereign wealth fund Khazanah Nasional Bhd. offered to buy out minority shareholders in a restructuring plan mandated by the consequences of the MH370 and MH17 disasters, and intensifying competition from the region’s LCC sector.

Khazanah’s offer stated it will pay MYR0.27 per share for a total of MYR1.38 bn (US$429 million) to buy the remaining 30.6% of shares it does not possess. The airline will need "substantial funding requirements" for the next few years to sustain operations, it said.

Khazanah also stated: "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. Nothing less will be required in order to revive our national airline to be profitable as a commercial entity. The financial performance of MAS has not been favourable wherein MAS and its subsidiaries have recorded net losses for the past three financial years and for the latest quarter ended 31st March 2014. In addition, the share price of the company has generally not performed well on Bursa Securities over the last 12 months up to and including August 7th 2014.”

MAS’s shares had dropped 23% this year, right up to the suspension of trading in anticipation of the de-listing. Khazanah’s offer is 12.5% higher than yesterday's closing price. The airline stated that its board will discuss the Khazanah proposal, and that business operations will remain unchanged.