MAS shareholders to decide on privatisation plan on Nov 6

PETALING JAYA: Shareholders of Malaysian Airline System Bhd (MAS) are due to meet on Nov 6, 2014 to vote for the privatisation of the airline, in what may be Khazanah Nasional Bhd's last bid to restructure it.
Major shareholder Khazanah Nasional has proposed a selective capital reduction and repayment exercise (SCR) for MAS of 27 sen a share, before it embarks on its latest plan to turnaround the airline.
In a circular to shareholders yesterday independent adviser AmInvestment Bank Bhd, called the proposal "fair and reasonable" advising shareholders to take it.
"Any absence of financial support from Khazanah may lead to a possibility that MAS group may have to cease business," AmInvestment said.
If MAS'ceases operations, it noted that ordinary shareholders of MAS group will likely realise a value lower than the net assets attributable to shareholders ranging from 5.4 sen to 11.6 sen after taking into consideration the additional costs associated with the cessation of its business.
It added that MAS' cash reserves of RM2.4 billion as at June 30, 2014 would not be sufficient to sustain its cash requirements for the next 12 months, unless supported financially by its lenders and shareholders.
"However, at the current gearing level of MAS of 3.7 times, obtaining debt financing would be challenging and MAS may need to carry out another major cash call from its shareholders," it pointed out.