KHAZANAH Nasional Bhd has not discounted the possible merger between Malaysia Airlines Bhd (MAB) and the AirAsia group.
“In life, never say never to anything,” Khazanah managing director Shahril Ridza Ridzuan told Bloomberg TV in a recent interview.
He also said Khazanah considered several options for Malaysia Airlines and business partnerships such as that with Japan Airlines Co Ltd (JAL) was the best way forward then.
FocusM reported early this year that JAL and AirAsia were frontrunners to either merge or partner with the national carrier.
But Khazanah was leaning towards a merger with AirAsia as that was the way forward despite “high execution risks”.
The merger would only kick in after AirAsia Group Bhd and its long-haul sister AirAsia X Bhd became a single unit.
JAL proposed a RM1.12 bil injection of funds for a 25% stake and a proposal for KLIA to become a hub for Japan Airlines.
But Khazanah said that the MAB-AirAsia merger had “meaningful merger synergies” which the fund projects would bring in RM1.45 bil per year, a quantum set by a third-party consultant, presumably Morgan Stanley.
Khazanah hired Morgan Stanley on July 23 last year to explore strategic options for MAB.
Further, Khazanah wanted to push for a merger between the two AirAsias and MAB which would, in turn, be a listed entity. The caveat – Khazanah becomes a minority shareholder of a larger and listed airlines group.
Essentially, this meant that MAB would be sold and managed under AirAsia’s fleet of aircraft.
AirAsia also had a set of exemptions which sees Khazanah footing a bill north of RM8 bil. – July 10, 2020
Links to earlier stories can be found below:
Malaysia Airlines needs as much as RM21 bil to operate until 2025
How JAL proposes to turn around Malaysia Airlines
AirAsia’s takeover of Malaysia Airlines may cost Khazanah over RM8 bil
AirAsia appears in the lead to take over Malaysia Airlines
