Malaysia Airlines Suspends Trading of Stocks Pending Privatisation of Air Carrier; Majority Investor Offers 27 Sen per Share

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By Vittorio Hernandez | August 8, 2014 2:01 PM EST

Cows graze near the wreckage at the crash site of Malaysia Airlines Flight MH17 near the village of Hrabove (Grabovo), Donetsk region July 26, 2014. Nearly 300 people, 193 of them Dutch citizens, were killed when the Malaysia Airlines plane en route from Amsterdam to Kuala Lumpur was brought down in eastern Ukraine, where separatists are battling government forces, on July 17. REUTERS/Sergei Karpukhin (UKRAINE - Tags: POLITICS DISASTER TRANSPORT CIVIL UNREST)
Cows graze near the wreckage at the crash site of Malaysia Airlines Flight MH17 near the village of Hrabove (Grabovo), Donetsk region July 26, 2014. Nearly 300 people, 193 of them Dutch citizens, were killed when the Malaysia Airlines plane en route from Amsterdam to Kuala Lumpur was brought down in eastern Ukraine, where separatists are battling government forces, on July 17. REUTERS/Sergei Karpukhin (UKRAINE - Tags: POLITICS DISASTER TRANSPORT CIVIL UNREST)

Malaysia Airline System suspended on Friday the trading of the company's shares on the Malaysian Stock Exchange as part of the restructuring plan of the air carrier that was financially hit by two air tragedies in March and July 2014.

The air carrier will be privatised. State-run Khazanah Nasional, which holds a 69.37 stake in the airline, is offering 27 sen per share for stocks it does not hold yet. That would amount to almost $470 million or 1.4 billion ringgit.

Khazanah will conduct a comprehensive review and restructuring of the air carrier, owner of the two Boeing 777 jets were involved in the two biggest air disasters this year. MH370, with 239 people on board, left Kuala Lumpur on March 8 bound for Beijing and mysteriously disappeared. It remains missing until now, but all passengers and crew are presumed dead.

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MH17 left Amsterdam on July 17 bound for Kuala Lumpur with 298 people on board. It was downed by a missile and crashed in Ukraine.

But prior to the two aviation tragedies, Malaysia Airlines was operating at a loss for the past three years. The air carrier said privatising the company would give it space to put in place appropriate capital structure to meet its substantial funding requirements in the next few years and at the same time keep running amid a high level of debt.

"It is easier to restructure if it's a private company ... They don't need to worry about making announcements and the timing of it," said Ang Kok Heng, chief investment officer of Phillip Capital Management, based in KL.

Read: Malaysia Airlines Flight MH370: Australia Hired Dutch Firm Fugro Survey to Search for Missing Jet

The air carrier's shares have tumbled down 23 per cent in 2013, while analysts estimate it would lose over 1 billion ringgit as it deals with costs of the two tragedies and lesser passengers.

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(Photo: / )
Cows graze near the wreckage at the crash site of Malaysia Airlines Flight MH17 near the village of Hrabove (Grabovo), Donetsk region July 26, 2014. Nearly 300 people, 193 of them Dutch citizens, were killed when the Malaysia Airlines plane en route from Amsterdam to Kuala Lumpur was brought down in eastern Ukraine, where separatists are battling government forces, on July 17. REUTERS/Sergei Karpukhin (UKRAINE - Tags: POLITICS DISASTER TRANSPORT CIVIL UNREST)
(Photo: / )
Cows graze near the wreckage at the crash site of Malaysia Airlines Flight MH17 near the village of Hrabove (Grabovo), Donetsk region July 26, 2014. Nearly 300 people, 193 of them Dutch citizens, were killed when the Malaysia Airlines plane en route from Amsterdam to Kuala Lumpur was brought down in eastern Ukraine, where separatists are battling government forces, on July 17. REUTERS/Sergei Karpukhin (UKRAINE - Tags: POLITICS DISASTER TRANSPORT CIVIL UNREST)
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