While there have been several proposals in this regard, a review of the options available to us is still ongoing, says Khazanah
by BLOOMBERG/ pic by BLOOMBERG
HONG KONG • Air France-KLM SA proposed buying as much as 49% of Malaysia Airlines Bhd (MAB), Reuters reported, as Prime Minister Tun Dr Mahathir Mohamad’s government considers a handful of suitors for the flag carrier.
Japan Airlines Co Ltd is also looking at a 25% stake, Reuters said, citing unnamed sources with knowledge of the matter. Air France-KLM proposed establishing a maintenance, repair and overhaul (MRO) services hub in Malaysia, the report said, while Japan Airlines offered to make the country its regional hub for South-East Asia.
Malaysia’s AirAsia Group Bhd and Malindo Airways Sdn Bhd, a unit of PT Lion Mentari Airlines, also submitted proposals, it said, without providing details.
An Air France-KLM spokeswoman declined to comment, while spokespeople for Japan Airlines and AirAsia weren’t immediately able to comment. A representative for Lion wasn’t immediately reachable.
Dr Mahathir said at a media briefing in Langkawi on Monday that the government had received about five proposals to turn around the airline, but that a few of them were “just no go”.
Sovereign wealth fund Khazanah Nasional Bhd took MAB private in late 2014 by buying the remaining 30.6% of its outstanding stock for RM1.38 billion as part of a RM6 billion pledge to return it to profitability.
The fund said yesterday it is working with the government and MAB to find a solution. “While there have been several proposals in this regard, a review of the options available to us is still ongoing,” it said in a statement.
Last October, Japan Airlines rejected a report in a business daily newspaper that said it was planning to take a stake in MAB, saying it was instead waiting for approval to begin a tie-up with the company.
In May, the airlines said they’d pursue a joint business on flights between Malaysia and Japan, stoking speculation the Japanese carrier could invest.
The report said Khazanah had shortlisted two other airlines among potential buyers: Qatar Airways Co QCSC and China Southern Airlines Co Ltd. Khazanah hired Morgan Stanley in July to look at strategic options for MAB, which suffered two high-profile disasters in 2014 with the disappearance of flight MH370 in 2014 and the shooting down of MH17 over eastern Ukraine.