AirAsia, Malaysia Airlines to sign share swap deal
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Xinhua, August 7, 2011
Malaysia Airlines (MAS) and world's leading budget carrier AirAsia pledge to seal a share swap deal in a bid to further strengthen their competitive capacity in the region, local media said on Sunday.
Local strategic investment company Khazanah Nasional Bhd, which holds shares in both MAS and AirAsia's major shareholder, Tune Air Sdn Bhd, is said to have concluded negotiations to grant its 17 percent state in MAS to AirAsia and get similar amount of AirAsia shares in return, local daily TheStar quoted market source as saying here on Sunday.
Under the deal, AirAsia Chief Executive Officer Tony Fernandes will get a 20 percent stake in MAS, making him the single biggest shareholder, it said. Fernandes and his co-founder partner Kamarudin Meranun hold 26.28 percent in AirAsia.
The deal is seen as a move to save the national carrier which suffered a sharp net loss of 242.3 million ringgit (80.8 million U. S. dollars) in the first quarter of 2011 due to high fuel cost and narrowing yields. MAS made a net profit of 310.6 million ringgit ( 103.5 million U.S. dollars) in the first quarter of 2010.
It will also help strengthen the competitiveness of both sides in fleet size, frequencies and destinations with other regional rivals.
The deal has already got nod from the government and will be signed next week, said the daily.
AirAsia raked in a profit of 1.5 billion ringgit (500 million U. S. dollars) in 2010 and 171.9 million ringgit (57.3 million U.S. dollars) in the first quarter of 2011.
