Khazanah wants MAS to keep its name in overhaul plan

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(August 29): State sovereign fund Khazanah Nasional Berhad has proposed that Malaysia Airlines (MAS) keep its name as it undergoes a massive RM6 billion restructuring exercise aimed at returning the national carrier to profitability.

Managing director Tan Sri Azman Mokhtar said MAS's name resonates with Malaysians and surveys conducted by them confirmed their sentiments that the name should be retained.

"As far as we are concerned, we have recommended that the name stays but its new company will do whatever it can to re-tweak the brand," he said at a press conference to announce the revamp plan for the ailing airline.

Under the revamp, a new company will be set up to house the carrier once it completes its delisting exercise by the end of this year.

Khazanah had previously set up a special purpose vehicle Penerbangan Malaysia Berhad as part of its Wide Asset Unbundling (WAU) exercise in 2002, a year after Putrajaya bought MAS from tycoon Tan Sri Tajuddin Ramli.

There had been reports previously that the troubled airline may change its name and rebrand the company following two aviation disasters within six months.

Flight MH370 from Kuala Lumpur to Beijing vanished with 239 people on board in March, while flight MH17 from Amsterdam was shot down over Ukrainian air space, killing all 298 people on board on July 17.

Khazanah today unveiled a 12-point comprehensive exercise for the flag carrier aimed at improving its finances, the earliest by 2017.

It will also see the setting up of a new company to house the carrier, rationalise routes, renegotiate current contracts, cut 30% of the 20,000 strong workforce and move its operations from Subang to Kuala Lumpur International Airport.

MAS will be taken private by Khazanah, which owns over 69% of the carrier. Earlier in August, it had announced its plan to buy out shares it does not own at 27 sen for each MAS share, amounting to nearly RM1.4 billion, to take the troubled airline private.

Another RM1.6 billion will be spent on restructuring and retrenchment costs, while RM3 will be injected progressively into the new company.

Current CEO Ahmad Jauhari Yahya will continue to lead until July 2015 when the new company comes into force, while Khazanah will announce his successor before the end of this year.

If everything goes as planned, MAS will be relisted within three to five years, or between the end of 2017 and 2019, and Khazanah will embark on a sell-down or partial sell down of its stake.