|Azman: “We have some time to get the Act enacted. It’s urgent, but we can wait until the start of the new year after MAS is privatised.” Photo by Patrick Goh|
KUALA LUMPUR: The MAS Act, which is to facilitate the restructuring of ailing national carrier Malaysian Airline System Bhd (MAS) in a comprehensive, timely and holistic manner, is expected to be tabled in the next Parliament session, which is set to begin next week, said Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar.
“[The date of enactment of] the MAS Act would depend not just on Khazanah, but it’s more the domain of the government and the Attorney General’s (AG) Chambers. So, it would not be right for me to explain. Parliament will open next week, and it is a fairly long session to the end of the year,” he told reporters after the opening of the Khazanah Megratrends Forum 2014 yesterday.
“We have some time to get the Act enacted. It’s urgent, but we can wait until the start of the new year after MAS is privatised,” he said.
Azman said, nevertheless, Khazanah has begun work with the AG’s Chambers to set up the MAS Act.
He noted that it is “an important enabling Act” once MAS is privatised and its assets and operations are transferred to a new company (NewCo).
Last month, Khazanah unveiled a RM6 billion, 12-step recovery plan for its 69.37%-owned MAS, which has been ridden with financial troubles for years, and was exacerbated further by two airline tragedies earlier this year. Analysts have estimated that MAS’ depleting cash reserves would eventually run out come the end of next year if something radical is not done to revamp the airline.
One of the most important and earliest processes which Khazanah posited was to delist the current MAS and transfer a leaner workforce and operations into NewCo by the end of this year.
This way, it would give the airline a chance to break up all existing contracts, which have been said to be lopsided and uncompetitive, and negotiate new ones for NewCo.
This is where the MAS Act would be imperative, as it would put matters into law to sign competitive contracts.
Azman also said plans to set up an Aviation Commission have started with a board member of Khazanah having briefed Prime Minister Datuk Seri Najib Razak on the proposed commission.
Meanwhile, Azman said Khazanah’s wholly-owned theme park operator unit, Themed Attractions and Resorts Sdn Bhd (TAR), will not be going public this year.
“There are only three months left in this year. So, no (to TAR going for listing in 2014),” he said.
He said while TAR is doing well financially, Khazanah is in no rush to list the company as the latter needs to be on firmer financial footing before offering its shares to the public.
A check on the Companies Commission of Malaysia showed that for the financial year ended Dec 31, 2013 (FY13), the theme park operator made a net profit of RM231,839 on revenue of RM136.16 million. This compared to the previous year’s net loss of RM30.13 million and revenue of RM271,086.
This article first appeared in The Edge Financial Daily, on September 30, 2014.