Malaysia Airlines suspends share trading ahead of announcement

MALAYSIA Airlines has suspended trading in its shares amid expectations of a corporate restructuring following the twin disasters of MH370 and MH17.

Ground staff prepare Malaysia Airlines planes for departure at Kuala Lumpur International Airport in Sepang on July 30, 2014. The remains of Flight MH17 victims will be handed over to the Netherlands, while Malaysia will receive the doomed plane's black boxes after Kuala Lumpur struck a breakthrough deal with Ukrainian separatists on July 22. AFP PHOTO / MOHD RASFAN

UPDATED: MALAYSIA’S state investment company says it wants to remove struggling Malaysia Airlines from the stock exchange, making it fully state-owned before a far-reaching overhaul of its business.

Khazanah Nasional, which owns a majority stake in the carrier, says Friday it plans to buy out minority shareholders at a premium to the airline’s recent share price.

The deeply troubled carrier earlier suspended trading in its shares amid expectations of a corporate restructuring following the twin disasters of MH370 and MH17.

In a statement filed with the Kuala Lumpur stock exchange, the flag carrier said it suspended trading at the request of majority shareholder Khazanah Nasional “pending a proposal from Khazanah in relation to a material corporate exercise involving the company”.

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Speculation is mounting that Khazanah, which owns 70 per cent of the carrier, will take the airline private before implementing a major restructuring to save the company from a feared bankruptcy. In June, Khazanah had said it would announce a plan within six to 12 months.

Malaysia Airlines has reeled from years of financial losses as it struggles to keep up with intensifying competition in the industry, and its survival is now seen as in peril following this year’s air catastrophes.

The stock exchange filing gave no indication when a further announcement on plans for the airline would be made.

The company is expected to unveil its second-quarter earnings in mid-August.

It lost 4.1 billion ringgit ($A1.41 billion) from 2011-13, and a further 443 million ringgit in the first quarter of this year, blaming MH370’s “dramatic impact” on bookings.

MH370 disappeared mysteriously in March with 239 people aboard. No trace has been found and the airline was widely criticised for its handling of the crisis.

On July 17, MH17 was shot down over Ukraine, with another 298 people killed.

Though it formerly had a solid safety reputation, the carrier’s association with tragedy has pummelled bookings, and analysts said it is burning through its cash reserves at a rate of around $US2 million ($A2.16 million) per day as it struggles to survive.

Originally published as Malaysia Airlines suspends share trading ahead of announcement