Malaysia Airlines’ suitors down to 4, says Azmin

Emphasis is placed on proposals that take into account financial prudence and synergy in the operations of Malaysia Airlines

pic by MUHD AMIN NAHARUL

THE bidders to help revive Malaysia Airlines Bhd (MAB) have been narrowed down to four as its sole shareholder, Khazanah Nasional Bhd, seeks a final resolution to the billions of ringgit-losing national carrier.

Analysts have been speculating the likelihood that the final four bidders could be Japan Airlines Co Ltd (JAL), Qatar Airways, Najah Air Sdn Bhd and frill-free long-haul carrier AirAsia X Bhd.

Industry players believed the four companies have credible proposals, while some of the other offers are seen short of value to take the national carrier which maintains a strong brand presence despite its financial difficulties.

Invitations for bids to help MAB were issued in August this year and the government would announce the outcome by year-end or early next year.

Khazanah and the carrier’s holding company, Malaysia Aviation Group Bhd, had invited proposals from 20 investors to become MAB’s strategic partners. The government is ready to trim its shareholding, reduce its risk exposure and stop further capital injection into the national carrier.

Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said the proposals from the four shortlisted investors will be evaluated by the Khazanah’s board.

“Emphasis is placed on proposals that take into account financial prudence and synergy in the operations of Malaysia Airlines.

“Following the evaluation, a presentation will be made to Khazanah’s board of directors in November and a decision is expected by the end of this year, or early next year,” Azmin told the Dewan Rakyat.

This is the first time the government had announced the status of the bids for MAB.

Azmin was responding to Datuk Alexander Nanta Linggi (Gabungan Parti Sarawak-Kapit) who wanted to know if the Japan’s carrier is planning to take over Malaysia’s national airline and details of the approach.

However, Azmin said the government is unable to reveal further details on the strategic investors due to the non-disclosure agreement signed with all the bidders.

“For the time being, Malaysia Airlines is strengthening its operations and internal management through cost-cutting efforts, improving its services and enhancing code sharing agreements to face challenges in the aviation industry,” he said.

Datuk Seri Mustapa Mohamed (Pakatan Harapan-Jeli) asked whether the government would maintain a golden share in the national carrier and if any local carriers are among the four shortlisted bidders.

Azmin said while the new shareholding structure in Malaysia Airlines has not been finalised, the government will continue to hold a significant stake under the new structure.

“The government will ensure that through Khazanah, we will still have an important stake and influence in the new structure. However, we have not finalised the new structure because we are still reviewing them.

“We have received suggestions where strategic investors want a control over the majority of the shares. Some think that, Khazanah should remain as majority shareholder so we will take all of these into consideration in the new structure,” he said.

Azmin reiterated his inability to disclose further information on the identity of the shortlisted companies but said they were recognised brands, internationally and regionally.

Khazanah recorded its first loss in over a decade last year, with a pretax loss of RM6.3 billion due to an impairment worth RM7.3 billion. Azmin yesterday revealed that RM3.1 billion was attributed to the ailing carrier.

Despite billions of ringgit worth of government funds pumped into the airline since 2014, MAB continues to bleed from high operating costs and cutthroat competition.