Khazanah evaluating business proposals on MAS

PETALING JAYA: Khazanah Nasional Bhd, which said Friday that it is on track to make a key leadership appointment by end of December, is evaluating business proposals, of which it has received no less than 28, to either participate in or complement its Malaysian Airline System (MAS) Recovery Plan.
"We wish to state that as required by Khazanah's operating processes and procedures, only credible proposals are evaluated and assessed , in a process that, if they qualify, will be ultimately tabled to the board of directors of Khazanah, or if appropriate, channelled to the management and board of directors of MAS," the sovereign wealth fund said in a statement.
Although the statement made no mention of it, a business proposal from former MAS managing director Tan Sri Abdul Aziz Abdul Rahman's Jentayu Danaraksa Sdn Bhd is believed to to be a part of the list of proposals in Khazanah's hands. Jentayu Danaraksa's plan is to take over the airline's engineering division and community carrier Firefly as well as the flight leasing company Penerbangan Malaysia Bhd.A detailed plan is reportedly expected to be released in mid-December.
Khazanah did not specify any of the proposals it is evaluating.
Key upcoming milestones in the next three months , as scheduled, include the proposed delisting of MAS after the completion of the selective capital reduction (SCR) (by end - December ), tabling of the MAS Bill in the Dewan Negara (early December),and the disbursement of first tranche of RM2 billion conditional upon successful MAS delisting). Migration of staff from Subang
to Support Facility Building at KLIA is on track to begin in Q2 2015.
A comprehensive review of all contracts, which number around 5,000, is underway, with contracts categorised for novation, renegotiation or termination.
The priority is to review contracts that provide significant opportunity for cost reduction and efficiency gain. It is also revising the limit of authorities for contract awards and revised guidelines for entering into new contracts and contract renewals are in place.
Under its plans to rights size MAS staff to an estimated 14,000, Khazanah said an assessment of the remaining staff besides the top 100 inclusive of those in overseas locations, has commenced, and is expected to be completed by end - February 2015. The final composition of NewCo employees will be dependent on NewCo business model requirements, redesigned work practices for operational transformation and renewed labour agreements.
Khazanah also said that 29 on -the-ground sessions with employees have been held by the Board Restructuring Committee members, in stages, for all functions within the organisation 171 cascade sessions by MAS management, reaching 15,700 staff across all divisions.
Khazanah also said that a public sentiment survey to gauge the Rakyat's views and opinions of MAS and the restructuring has found broad support for MAS as the national flag carrier among Malaysians, who acknowledged the airline as a key contributor to national development.
A Restructuring Management Office (RMO) with close to 50 personnel is in full operations at MAS. The office is led by Chief Restructuring Officer (CRO) Mohd Nadziruddin Mohd Basri, who was previously CFO at MAS.
The CRO reports to the MAS Board Restructuring Committee, which comprises three independent and two non
- independent Board members, and the MAS CEO.
The BRC is chaired by Tan Sri Krishnan Tan Boon Seng and has had 22 sittings since its inception.
Meanwhile MAS announced last Friday that its net loss had widened to RM576.11 million for the third quarter ended September 30 compared with RM375.44 million in the previous corresponding period.
This was due to depreciation, amortisation and impairment of RM218.4 million, unrealised foreign exchange loss of RM42.2 million, finance costs of RM123.8 million and higher fair value change of derivative of RM18.1 million loss.
Third-quarter revenue also went down 13.36% to RM3.38 billion against RM3.90 billion a year ago.