KUALA LUMPUR, Oct 15 – Malaysia Airlines System Bhd (MAS) will hold an extraordinary general meeting (EGM) on November 6 for minority shareholders to decide on a buyout proposal from Khazanah Nasional. Bernama reported today that the minority shareholders, who currently hold a 30.63% stake in the company, can exercise their voting rights on the proposal which amounts to an offer price of 27 sen per share.
This represents a premium ranging between 6.4 sen and 12.6 sen to the fair value of between 14.4 sen and 20.6 sen per share. According to Bernama, the ailing national carrier proposed for its issued and paid-up capital be reduced to RM1.16 billion comprising 11.59 billion ordinary shares from RM1.67 billion comprising 16.71 billion ordinary shares.
“The airline’s share premium account is also being reduced to RM865.59 million from RM1.74 billion,” it said in a filing to Bursa Malaysia in Kuala Lumpur today. “The proposed offer is an opportunity to the entitled shareholders to realise their investments at a premium over the past six months historical volume weighted average market price of MAS shares,” the statement said, according to Bernama.
MAS’s share value had declined by 19% this year. Meanwhile, Bloomberg reported MAS as recommending to small shareholders that they should accept the offer from Khazanah as “the proposal was fair”. MAS directors had recommended the buyout proposal after the airline’s audit committee found Khazanah’s offer to be fair and reasonable.
Khazanah, which owns 69.37% of MAS, will undertake a comprehensive review and restructuring of the airline, which has been struggling after being hit by two tragedies – the disappearance of flight MH370 and the shooting down of flight MH17 in Ukraine – in the space of less than five months. The airline will also be cutting 6,000 jobs and is currently on a search for a new chief executive officer as part of its RM6 billion restructuring plan to bring it back to a profitable position. – October 15, 2014.