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Reuters: Malaysian Airline dips despite revamp talk
By Wong Choon Mei
3/1/2002 12:21 am Thu
Wednesday January 2, 5:22 PM
UPDATE 1-Malaysian Airline dips despite revamp talk
(Adds details, analyst comments in paragraph 13 onwards)
By Wong Choon Mei
KUALA LUMPUR, Jan 2 (Reuters) - Shares in Malaysian Airline
System fell eight percent on Wednesday, despite reports the state's
economic adviser had been appointed to its board to speed up an
eight billion ringgit ($2.1 billion) debt restructuring plan.
Analysts said investors, eyeing the stock's 66-percent gain over
the past month, might prefer to cash out until more concrete
restructuring details emerged from the government, its main
shareholder with a 49-percent stake.
MAS shares were down 8.6 percent or 30 cents to 3.20 ringgit by
MAS officials declined to comment immediately on Wednesday's
report in the Asian Wall Street Journal that Nor Mohamed Yakcop,
economic adviser to the government, had been appointed to the
board of the ailing carrier.
"We have to check. If true, an announcement will be made in the
afternoon," a company official said.
The reported appointment comes barely a month after Azman
Yahya, the respected chairman of the Corporate Debt Restructuring
Committee, was made a director.
MAS shares have gained about two thirds since early December
after news of Azman's appointment broke, on hopes by investors
that it would lead to quicker resolution of MAS's financial problems.
Analysts expect the government to announce soon a plan to
recapitalise MAS which might include a bond issue to refinance its
loans, divestment of non-core businesses and an aircraft sale and
leaseback scheme to a state agency to lighten the company's
The airline's plan to get back into the black by 2004, after four
straight years of losses, has been set back by the slump in global
travel volumes following the September 11 attacks on the United
"Any appointment that can add weight to MAS finding its way out of
its huge losses is market positive but investors may want more
details to hang onto their shares," said C.K. Ngu, research head at
Ngu said a correction to the stock price was likely to be brief, as
investors anticipated the government's next move to resolve the
NO FOREIGN SALE SOON
Tuesday's comments made by Prime Minister Mahathir Mohamad
that the government would consider foreign partners for MAS were
seen as confidence-boosting for both the stock and the market,
though analysts ruled out any quick sale.
They said the airline would need to complete its restructuring, which
could take years, before it could attract any foreign buyer.
Malaysia, criticised by investors in the past for being
over-protective of strategic corporate assets, is seen becoming
more receptive to foreign buyers as it tries to revitalise its
"It is positive but don't read too much into it," said Noor Azwa of
KAF Research. "Getting foreign buyers at a time when the industry
is in crisis won't be easy. MAS needs to put its house in order
before anyone would want it."
Airlines that have shown interest in buying a slice of MAS include
KLM Royal Dutch Airlines NV , with whom the Malaysian carrier
has codeshare arrangements and a joint marketing, sales and
Elsewhere in the sector, the Malaysian government agreed last
Monday to extend until the end of March a memorandum of
understanding to sell 30 percent of Malaysia Airport Holdings,
the manager of its ultra-modern Kuala Lumpur International
Airport, to Dutch airport operator Schiphol.
UPDATE 1-Malaysia PM sees better growth, may stay on longer
01 Jan 2002 13:04
KUALA LUMPUR, Jan 1 (Reuters) - Malaysia's Prime Minister on
Tuesday forecast a return to more robust growth in 2002, and said
he might defer a planned retirement at the next election.
In an interview with Malaysia's official Bernama news agency,
Asia's longest-serving leader said he may contest the election, due
by the end of 2004, "in certain situations and if required" to ensure
the success of his Barisan Nasional coalition.
"I am 76. The desire to ensure Barisan Nasional's success is there,
but Barisan Nasional can achieve success even if I do not contest
or am no longer the leader," said Mahathir.
"This is a possibility but in certain situations if I am required to
contest, I will contest," he said without elaborating.
GROWTH SEEN RECOVERING IN 2002
Malaysian economic growth slumped in 2001, with Mahathir tipping
official numbers to emerge broadly in line with market expectations.
The Prime Minister said the economy was expected to grow less
than one percent in just-completed 2001, rising to around three
percent in 2002.
"We believe that for 2001 we may achieve growth of only between
0.5 percent and one percent, and in 2002 maybe about three
percent," he said.
A Reuters survey of 10 forecast houses in December showed an
average forecast of 0.43 percent growth in 2001, rising to 3.49
percent in 2002. In 2000 Malaysian GDP grew 8.5 percent.
Malaysia has cut its official GDP growth forecast for 2001 to 1.0-2.0
percent from 5.0-6.0 percent.
Mahathir, who has ruled multi-racial Malaysia for two decades and
who has stifled all past potential successors, said in 2000 he would
wind down and leave more work for his deputy Abdullah Badawi.
But Mahathir has shown little of sign of letting go and in June last
year, he appointed himself acting finance minister after the
resignation of Daim Zainuddin.
Mahathir told Bernama he still needs a finance minister or at least a
second finance minister.
U.S. TIES IMPROVED
On ties with Washington, Mahathir said relations between the two
countries have improved since President George W. Bush's
administration began almost a year ago.
"It's better now than before," he said.
Relations turned sour after former U.S. President Bill Clinton's
government condemned Malaysia for the sacking of Mahathir's
former deputy Anwar Ibrahim in 1998.
Once a prime-minister-in-waiting, Anwar is serving 15 years in jail
after being convicted on sex and corruption charges that he says
were trumped up after he became a threat to Mahathir.
Former Vice President Al Gore embarrassed Mahathir in 1998 by
walking out of him at a dinner in Kuala Lumpur after endorsing
Anwar's reform movement at the function.
Mahathir said a few foreign airlines, including some from Europe,
have shown some interest in acquiring a stake in loss-making
national carrier Malaysian Airlines System (MAS), but the
government had not made any decision.
Buried under eight billion ringgit ($2.0 billion) of debt, the airline was
dealt a blow by the global slump in air travel after the September 11
air attacks on the United States.