(Reuters) – Malaysian state investor Khazanah Nasional Bhd [KHAZA.UL] plans to take Malaysian Airline System Bhd (MAS) private as the first step in a major restructuring of the loss-making airline following the disappearance of its Flight MH370, two people with direct knowledge of the matter told Reuters.
A de-listing would pave the way for Khazanah to revive the ailing carrier, possibly by selling off its profitable engineering, airport services or budget airline units, trimming its bloated payroll and installing a new management team.
The restructuring and potential sale of MAS is politically fraught due to heavy opposition to job losses from its powerful labor union, which has hampered previous revival plans, and its status as Malaysia’s national flag-carrier.
At MAS’s current price of 21 sen per share, majority shareholder Khazanah would need to pay only 1.05 billion ringgit ($328 million) for the 30.6 percent of shares it does not already own, according to Reuters calculations.
Khazanah’s board, chaired by Prime Minister Najib Razak, is expected to meet at the end of July to discuss the plan, one of the people said, adding that an announcement would be made by the end of this year.
The sources declined to be identified because of the sensitivity of the issue.
The state investor is working with CIMB Investment Bank on the restructuring, the sources added, but cautioned that the plan, and its details, are subject to change depending on the ultimate decision by the government.
Khazanah said last month it was considering all options and would unveil plans within 6-12 months to restructure the airline, which has been squeezed into three straight years of losses by intense competition locally and on long-haul flights.
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