Aviation holding company Naluri completed the sale of its 29.1% stake in Malaysia Airlines (MAS) to the government in February as opposition continued to mount. Naluri announced in December that it had signed a conditional agreement with the Ministry of Finance covering the sale of its 224 million shares in the loss-making airline's parent, Malaysian Airline System, for 1.8 billion ringgit ($472 million).
The sale price, at 8 ringgit per share, represented a premium of 117% over the closing level of MAS shares on the local Kuala Lumpur Stock Exchange on 19 December, the last trading day before the agreement was announced.
Analysts criticised the deal, calling it a bailout of Tajudin Ramli, the entrepreneur behind Naluri and a friend of Malaysian prime minister Mahathir Mohamad. Tajudin, Naluri's chairman, paid 8 ringgit per share when he bought the biggest single stake in the national carrier in 1994. MAS has made losses for the last three financial years and is set to post a loss for this financial year, ending March. Its debt is more than $2.5 billion.
Critics were further angered by a waiver granted to the finance ministry in January on a requirement that a general offer be made for all outstanding shares at the 8 ringgit-per-share price.
A general offer is required once an individual party takes a more than one-third stake in a listed company. Malaysia's Securities Commission and Foreign Investment Committee both agreed to waive the requirement despite the fact that Naluri itself said the Ministry of Finance and "parties acting in concert with it" would hold a 49.19% stake once the deal was concluded. The Malaysian Government, however, is thought to hold at least 20% more through various investment vehicles,
Opposition parties formally objected to the waiver, saying it put minority shareholders at a disadvantage. They also called the government's purchase of Naluri's MAS stake an "abuse of public money". The opposition Parti Keadilan Nasional even filed a police report on 27 January over the buy-back and the waiver. Although the government had indicated it would sell a stake to a foreign carrier, many now doubt it will do so.
Following the 13 February sale the government appointed the chairman of state oil company Petronas, Azizan Zainul Abidin, as non-executive chairman to replace Tajudin.
Source: Airline Business
