State Fund to take over Malaysia Airlines
The Malaysian state investment firm Khazanah Nasional will carry out a "complete overhaul" of the troubled Malaysia Airlines. With Friday's move, Malaysia's government aims at reviving the loss-making company - which was hit by two tragic jetliner incidents this year.
Khazanah proposed that it would buy the shares it does not already own in Malaysia Airlines and delist the carrier, BBC reports.
The two tragedies that rocked the airline company were the baffling disappearance of the MH370 on March 8 which had 239 passengers onboard and the downing of flight MH17, carrying 298 people, by rebels over eastern Ukraine.
Post the disasters, it was expected that Malaysia Airline System would eventually delist it and make it private since ticket sales went down drastically.
According to Businessweek, Khazanah said in a statement Friday that it will be paying 27 sen a share for a total of 1.38 billion ringgit i.e. $429 million, to buy the remaining 30.6 percent that it doesn't own. The statement read that the airline will need "substantial funding requirements" for at least a few years so as to sustain operations. Malaysia's Prime Minister Najib Razak said that the restoration process will involve "painful steps and sacrifices."
Reuters reports that some of the few steps that need to be taken for the revamp are giving up less-profitable routes, trimming the inflated payroll and installing a new management team.
The airline company has been reporting losses for the past three years and the situation got out of hand after the two devastating incidents, post which customers have lost confidence in the airline. A full-scale rebranding of the airline is required to win back its lost glory.
