Hot Stock MAS heavily traded after shareholders approve privatisation

by **Cals** Fri 07 Nov 2014, 16:47

Hot Stock
MAS heavily traded after shareholders approve privatisation

KUALA LUMPUR (Nov 7): Malaysian Airline System Bhd (MAS) ([You must be registered and logged in to see this image.] Financial Dashboard) continued to be heavily traded subsequent to minority shareholders' approval of the company's planned privatisation.
Shareholders had approved the proposal at MAS' extraordinary general meeting (EGM) yesterday.
Today, MAS saw some 50 million shares changed hands at 12.30pm, making it the fifth most traded share across Bursa Malaysia. MAS' share price, however, remained unchanged at 26.5 sen after rising to an intraday high of 27 sen earlier.
AllianceDBS Research Sdn Bhd said MAS had passed the most difficult hurdle after getting shareholders's consent for the privatisation by Khazanah Nasional Bhd.
Malaysian government investment arm Khazanah, which owns 69.37% in MAS, has proposed to privatise MAS at 27 sen a share. The privatisation will be done via a selective capital reduction (SCR) in MAS.
AllianceDBS said the remaining procedures to delist MAS from the exchange, were “formality”.
“Next, Khazanah will need to obtain the approval of the High Court and the consent of the relevant creditors in order to complete the SCR exercise. These should not be an issue as most of the major creditors are government-linked entities,” AllianceDBS said in a report today.
Commenting on the national airline MAS' third quarter results, which will be announced this month, AllianceDBS believed that there could have been a reduction in MAS' aircraft utilisation.
This was due to a drop in aircraft utilisation at KLIA Main Terminal Building where MAS is the anchor airline.
“This will lift unit cost and drag bottomline as depreciation, lease and staff costs would be spread over a smaller base (available seat kilometres),” AllianceDBS said.
Lastly, AllianceDBS expected the SCR exercise to go through, and thus announced it had ceased coverage on MAS.
"Our last recommendation for the stock is to accept offer at RM0.27," AllianceDBS said.