Malaysian government takes over Malaysia Airlines for restructuring
Malaysia Airlines suspended trading in the Kuala Lumpur stock exchange Friday after the country's state investment company announced a buyout of all the shares to launch an overhaul of the airline, which has lost two aircraft this year.
Khazanah Nasional, which owns 69.37 percent of the company, will buy the rest of the shares in a transaction valued at $435 million, the company said in a statement.
The state organisation explained that the buyout was designed to undertake a "complete restructuring" of the company to reverse its poor performance and meet the airline's "substantial funding requirements".
Malaysia Airlines, hit hard by the loss of two of its aircraft, has seen three consecutive years of losses and a depreciation of 22.58 percent at the stock exchange during the last year in which the FTSE index has grown by 4.95 percent.
Khazanah indicated that the 12-month reform will impact 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," said the fund which is presided over by Prime Minister Najib Razak.
Malaysia Airlines flight MH370, en route to Beijing from Kuala Lumpur, disappeared March 8 with 239 people on board and so far no sign of the aircraft has been spotted in rescue operations under way in a remote part of the southern Indian Ocean.
On July 17, flight MH17, which was flying from Amsterdam to Kuala Lumpur, was shot down by a missile when it flew over war-torn eastern Ukraine, killing all 298 people on board.
(Posted on 08-08-2014)
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