November 29, 2014 by Suara Kebenaran
KUALA LUMPUR; Khazanah Nasional Bhd said there has been progress on all fronts towards the complete overhaul of Malaysia Airlines (MAS), under the five-year 12-point MAS Recovery Plan (MRP) announced on August 29. The government investment arm said it would continue providing quarterly updates to inform all stakeholders, especially the public, on the progress of the restructuring.
“The restructuring of MAS is well on track, with several major milestones reached and several more expected in the next quarter, particularly by year-end,” Managing Director, Tan Sri Azman Mokhtar said.
Khazanah said overall progress was made across the MRP’s four main areas of governance and financial framework, operating business model, leadership and human capital, and, regulatory and enabling environment. It highlighted that the MAS Restructuring Management Office is fully operational with close to 50 personnel.
On the proposed delisting, Khazanah said MAS minority shareholders had approved the proposal for a selective capital reduction and repayment exercise (SCR) at the recent Extraordinary General Meeting. “The SCR is expected to be completed by December 3, 2014, pending approval from the High Court,” it said.
The delisting is one of the conditions for the MRP’s total restructuring and investment capital funding of RM6 billion. With the delisting, the first tranche of Khazanah’s conditional capital injection amounting to RM2 billion, will be disbursed to minority shareholders, as well as for working capital and restructuring expenditure.
Khazanah said MAS’ replacement, Malaysia Airlines Bhd, was incorporated on November 7 and is targeted to be operational by July 1, 2015. The Malaysian Airline System Bhd (Administration) Bill 2014, was tabled and passed by the Dewan Rakyat on November 27. The Bill is expected to be tabled in the Dewan Negara during its upcoming session in December 2014.
Khazanah expects to make a year-end key announcement on Malaysia Airlines Bhd’s leadership. A talent assessment process is reportedly underway at MAS to identify the workforce required by Malaysia Airlines Bhd, estimated at 14,000 employees. Meanwhile, framework for the proposed Corporate Reskilling Centre and Outplacement Centre, has been developed and is targeted to be launched by April 1, 2015.
According to Khazanah, the Terms of Reference of the Employee Consultative Panel (ECP) has also been formulated.
The ECP will convene its first meeting in early December 2014.
Even as a comprehensive review of 5,000 contracts is ongoing, priority is given to contracts with potentially significant opportunity for cost reduction and efficiency gains. In addition, revised guidelines for entering into new contracts and contract renewals are in place, while preparations are being made to revise the limit of authorities for contract awards.
Khazanah said the terms of reference of the Governance and Ethics Committee (GEC) have been formulated. Targeted to be operational upon the completion of MAS’ delisting, it will have a finite life of three to five years.
Staff are scheduled to move from Subang to Kuala Lumpur International Airport (KLIA) commecing second quarter of 2015. Initially planned to start this year, the move was deferred to ensure MAS employees who will not be migrating to Malaysia Airlines Bhd, would not be unnecessarily burdened by having to relocate to the KLIA area.
Meanwhile, renovation work at the Support Facility Building and renovation planning of engineering hangars at KLIA have commenced. Land for the development of Malaysia Airlines Bhd’s headquarters has been identified.
Khazanah has been approached by many individuals with relevant expertise and experience who voluntarily want to be part of the restructuring. Thus far, numerous CVs (curriculum vitae) have been received and reviewed, with several set to join the restructuring effort. Khazanah has also received no less than 28 business proposals expressing interest in participating in or complementing the MRP. “We wish to state that as required by Khazanah’s operating processes and procedures, only credible proposals are evaluated and assessed,” it said.