KUALA LUMPUR: Following Board approval, the major shareholder of Malaysia Airlines (MAS) plans to acquire 100 percent of the company and take it private by the fourth quarter of 2014.
Khazanah Nasional Berhad, Malaysia's sovereign wealth fund, is offering MAS minority shareholders a 12.5 percent premium above the current market price for a total of RM1.382 billion.
Khazanah says the reason for the offer is based on the airline's accumulated net losses for the past three years and a subsequent drop of 22.58 percent in its share price over the past 12 months.
As MAS's majority shareholder, Khazanah says private ownership will allow it to complete a restructuring proposal - details of which will be announced at the end of August.
In a statement it said the proposed restructuring will require all parties to work together to undertake a complete overhaul of MAS including 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," it said.
Speaking at the airline's annual general meeting in June - little more than three weeks before the shooting down of MH17 - MAS CEO Ahmad Jauhari Yahya said: "Our only option at this point of our business evolution is radical or sweeping change. We have four real and tangible world-class assets: our product, our service, our engineering capabilities and our safety track record. To be competitive in the future, we have to unlock and unleash the full value of these great assets."
Khazanah holds sector investments in power, telecommunications, banking, healthcare, airport management, infrastructure, leisure & tourism, property development, broadcasting and technology.