Malaysia Airlines suspends shares as revamp looms
AP FILE PHOTO
KUALA LUMPUR–Deeply troubled Malaysia Airlines suspended trading in its shares Friday amid expectations of a corporate restructuring following the twin disasters of MH370 and MH17.
In a statement filed with the Kuala Lumpur stock exchange, the flag carrier said it suspended trading at the request of majority shareholder Khazanah Nasional “pending a proposal from Khazanah in relation to a material corporate exercise involving the company”.
Speculation is mounting that Khazanah, which owns 70-percent of the carrier, will take the airline private before implementing a major restructuring to save the company from a feared bankruptcy.
In June, Khazanah had said it would announce a plan within six to 12 months.
Malaysia Airlines has reeled from years of financial losses as it struggles to keep up with intensifying competition in the industry, and its survival is now seen as in peril following this year’s air catastrophes.
The stock exchange filing gave no indication when a further announcement on plans for the airline would be made.
The company is expected to unveil its second-quarter earnings in mid-August.
It lost 4.1 billion ringgit ($1.3 billion) from 2011-13, and a further 443 million ringgit in the first quarter of this year, blaming MH370’s “dramatic impact” on bookings.
MH370 disappeared mysteriously in March with 239 people aboard. No trace has been found and the airline was widely criticised for its handling of the crisis.
On July 17, MH17 was shot down over Ukraine, with another 298 people killed.
Though it formerly had a solid safety reputation, the carrier’s association with tragedy has pummelled bookings, and analysts said it is burning through its cash reserves at a rate of around $2 million per day as it struggles to survive.
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