KUALA LUMPUR Aug 7 Malaysia Airlines (MAS)
plans to suspend its shares from trading on Friday,
two sources familiar with the situation said, likely paving the
way for state investor Khazanah Nasional to take the
airline private as a first step in a major restructuring.
Trading in the company, whose official name is Malaysian
Airline System, will be halted due to "a pending corporate
announcement," according to the sources, who declined to
elaborate. The sources declined to be identified as the matter
The same sources told Reuters in early July that Khazanah,
which owns 69 percent of MAS, plans to take the airline private
as a slump in business since the disappearance of Flight MH370
on March 8.
Loss-making Malaysia Airlines' problems deepened on July 17
when its Flight MH17 was shot down over Ukraine, killing all 298
people on board. That incident accelerated the government's
plans to restructure the airline, the sources said.
A de-listing would pave the way for Khazanah, which is
chaired by Prime Minister Najib Razak, to revive the ailing
carrier, possibly by selling off its profitable engineering,
airport services or budget airline units, trimming its payroll
and installing a new management team.
MAS officials could not immediately be reached for comment
on the share suspension. A Khazanah spokesperson said the fund
could not comment on "speculation."
The restructuring and potential sale of MAS is politically
fraught due to opposition to job losses from its labour union,
which has hampered previous revival plans, and its status as
Malaysia's national flag-carrier.
At MAS's current price of 24 sen per share, majority
shareholder Khazanah would need to pay around 1.23 billion
ringgit ($383 million) for the 30.6 percent of shares it does
not already own, according to Reuters calculations.
Sources said Khazanah is expected to pay a premium over
Thursday's closing price.
Already squeezed by intense local and longer-haul
competition from rivals such as AirAsia, MAS turned in
its worst quarterly performance in two years in the
January-March period and is currently burning through its
The company is expected to announce its April-June earnings
on Aug. 20. Analysts said it could be the airline's weakest
quarterly performance yet partly due to flight cancellations
after the disappearance of MH370.
MAS shares ended unchanged at 24 sen per share on Thursday,
4 percent lower than where they were before the disappearance of
MH370. The broader index rose 1.9 percent during the
(Reporting By Yantoultra Ngui; editing by Stuart Grudgings and