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