KL throws lifeline to MAS chief<\/p>\n
KUALA LUMPUR (Reuters): The Malaysian government on Wednesday
\nregained control of national carrier Malaysian Airline System Bhd
\nin a deal seen providing a lifeline to debt-laden owner Tajudin
\nRamli.<\/p>\n
The $472 million deal precedes the sale of a stake in the
\nairline by the government to a foreign airline. Swissair and
\nAustralia's Qantas have confirmed they are in talks to buy into
\nMAS.<\/p>\n
Ending months of speculation, Tajudin's aviation firm Naluri
\nBhd said it has agreed to sell its entire 29.09 percent
\ncontrolling stake in MAS to the finance ministry for 1.79
\nbillion, ($472 million) or eight ringgit a share.<\/p>\n
The deal, priced at 117 percent above MAS's Dec. 19 closing
\nprice of 3.68 ringgit, drew sharp criticism from analysts who
\nbranded it as a government bailout of the embattled tycoon.<\/p>\n
\"It's a bailout,\" said one aviation analyst at a local
\nbrokerage. \"Tajudin is selling for eight ringgit when one party
\ntwo weeks ago sold for just four ringgit.\"<\/p>\n
On Dec. 1, the government paid four ringgit a share for 9.09
\npercent stake in MAS from Brunei Investment Agency.<\/p>\n
MAS shares closed six cents down at 3.62 ringgit, between a
\nyear high of five and a low of 2.77.<\/p>\n
The government, which sold MAS to Tajudin in 1994, has
\nindicated it wants to sell part, or all, of Tajudin's stake to a
\nforeign airline to help turn around MAS.<\/p>\n
The purchase of Tajudin's stake will raise the government
\nholding of MAS to around 50 percent from 20 percent. But the
\ngovernment is expected to offload part, or all, of Tajudin's
\nstake to a foreign airline.<\/p>\n
The Malaysian government already has a golden share in the
\ncarrier -- which allows it to veto major policy decisions.<\/p>\n
Tajudin had been seeking up to eight ringgit each for his
\nblock of 224 million shares, the same price he paid in 1994.<\/p>\n
Some analysts said MAS was fairly valued at between 4.45
\nringgit and 6.68 ringgit, or at 20 to 30 percent discount to its
\nfinancial year 2002 enterprise value over EBITDA (earnings before
\ninterest, taxation, depreciation and amortization).<\/p>\n
MAS is saddled with more than $2.0 billion in mainly long-term
\ndebt and is headed for a fourth year of losses.<\/p>",
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