KUALA LUMPUR, Sept 25 — Khazanah Nasional Bhd’s proposal to merge ailing national carrier Malaysia Airlines Bhd (MAB) and long-haul low-cost carrier AirAsia X Bhd (AAX) is reportedly facing strong resistance from the fund’s stakeholders.
Financial paper The Malaysian Reserve cited an unnamed source as saying several shareholders had objected to the merger as they see it as a bailout for the public-listed company.
Malay Mail is currently seeking official comment from Khazanah, MAB and AirAsia X.
The state-owned sovereign wealth fund, which is the sole shareholder for MAB, has reportedly been looking to rid the national carrier from its books after a botched RM6 billion capital injection since 2014 as well as a massive restructuring which saw the termination of 6,000 employees.
AAX, on the other hand, reportedly posted a net loss of RM207.11 million for the second quarter of 2019 and a net loss of RM312.69 million last year as well as a loss of RM244 million in 2015.
It was reported that Putrajaya would have to inject money to cover MAB’s operational expenditure, recapitalise the airline and settle all outstanding debts before any merger can see the light of day.
“Basically, AAX shareholders would get a ‘cleaner’ MAB. Why sell when the government has to clean it up prior to the sale? In fact, there is no single benefit for MAB to merge with AAX,” the report quoted the source, who claimed to be familiar with the matter.
“The latter is not even profitable. The ‘merger’ would only benefit AAX’s shareholders and not MAB or the Malaysian public.
“It seems like the management of Khazanah is pushing to bail out AAX in the pretext of saving MAB. This is not what they are tasked to do,” the source added.
AirAsia founder and group chief executive officer Tan Sri Tony Fernandes has, however, brushed off rumours about the merger with MAB.
Earlier this year, Fernandes said his AirAsia Group Bhd has no plans to reinitiate its 2011 share swap plan with MAB that was rejected by former prime minister Datuk Seri Najib Razak.
In 2011, AirAsia founders Fernandes and Datuk Kamarudin Meranun joined the Malaysia Airlines board in a share swap deal.
However, the deal soured due to disagreements over how to run the airline.