Malaysian sovereign wealth fund Khazanah Nasional has decided to privatise Malaysia Airlines (MAS).
In a statement on Bursa Malaysia, Khazanah says it will buy out publicly held shares of the carrier at a slight premium to their current market value. The deal will see Khazanah, which now holds 69.4% of the carrier, pay about MYR1.4 billion ($435 million) for the 30% of MAS held in other hands, making it the sole shareholder.
“The financial performance of MAS has not been favourable wherein MAS and its subsidiaries have recorded net losses for the past three financial years and for the latest quarter ended 31 March 2014,” says the statement. “In addition, the share price of the company has generally not performed well on Bursa Securities over the last 12 months up to and including 7 August 2014.”
It notes that MAS shares have fallen 22.6% in the last 12 months, compared with a 5% increase in the FTSE Malaysia Kuala Lumpur Composite Index.
Upon completion of the proposed buy out, Khazanah will then request to de-list MAS from Bursa Malaysia.