Stakeholders Vote For MAS Privatization

10th Nov 2014

The minority shareholders of the carrier have come up with a decision to allow the government to give up its majority stakes in the airline to private investors.

The Malaysian government currently owns a majority stake, at 69.37%, in Malaysia Airlines through its strategic investment fund, Khazanah Nasional Bhd.

The shareholders were attending an extraordinary general meeting recently in Kuala Lumpur to vote on Khazanah's proposal to buy out government's stakes in the airline. Khazanah has offered the government $489.5 million for the takeover.

The state-controlled flag carrier used to be one of the world's most profitable airlines and even awarded several times over the years until three years ago when it suffered losses again for the third time since pre-1997 Asian financial crisis.

Since then it was unable to abate a series of unprofitable operations year after year. The carrier's struggle back to profitability was exacerbated when its plane, flight MH370, disappeared mysteriously in March 2014 less than one hour after takeoff from Kuala Lumpur on its way to Beijing, China. No trace of the aircraft was ever found since then including all its 227 passengers and 12 crew on board.

As if the airline's agony was not enough when, on July 17, another Malaysia Airlines flight, MH17, crashed near the war-torn region of Ukraine. It was believed to have been hit by a surface-to-air missile. The crash site was known to be a rebel-infested region in Ukraine. This particular incident killed all the 298 people on board as the plane plummeted to the ground in a massive ball of fire scattering its debris to an area over 34 square kilometers.

The two incidents happened barely five months apart.

The vote was needed in order to authorize Khazanah to purchase the majority stakes held by the government. The 559 minority shareholders take up 93.3 million of the total shares.

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