MAS falls 6% after Etihad denies in talks for stake in troubled airline

by **Cals** Fri 20 Jun 2014, 01:50

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Thursday, 19 June 2014 17:51

KUALA LUMPUR (June 19): Malaysian Airline System Bhd (MAS) erased earlier gains for a 1.5 sen or 6% decline after Abu Dhabi-based Etihad Airways said it was not negotiating with MAS for a potential stake in the Malaysian entity.

At 5pm, MAS shares closed at 23.5 sen. The bourse's most-active stock had earlier gained as much as two sen or 8% to 27 sen.

Etihad stated its position in a statement issued in response to news reports, which indicated the airline might establish a collaboration with MAS.

"Etihad Airways would like to confirm that it is not in talks with Malaysia Airlines about the possibility of an equity investment in the carrier," Etihad said.

News reports had earlier hinted at a possible partnership, which might see Etihad acquiring a stake in MAS.

But that could be a challenge, the reports said, as the Malaysian government was seen unwilling to decrease its stake in MAS.

Malaysian government investment arm Khazanah Nasional Bhd owns 69.37% in MAS.

Earlier, Reuters reported that Khazanah would unwrap plans to restructure MAS within six to 12 months, as a slump in business since the disappearance of flight MH370 left the carrier set to exhaust its cash reserves by mid-2015.

Khazanah Managing Director Tan Sri Azman Mokhtar said then the government was committed to formulating a revival plan for the airline within the next 12 months.

MAS' net loss widened to RM443.4 million in the first quarter ended March 31, 2014 from a net loss of RM278.8 million a year earlier.