Khazanah ~ The MAS (3786) Recovery Plan ~ gonna help ???

The 12 Distinctive Features:

1. Creation of a new legal entity (“NewCo”) to house New MAS, Delist, and Relist 
2. Funding of up to RM6 billion on a strict conditional basis, and halving of net gearing to approximately 120%
3. Reset the operating business model through a more regionally-focused network, lower cost structure, and greater focus on revenue yield management
4. Move headquarters (“HQ”) and operations from Subang to KLIA
5. Strengthen assurance, integrity and safety functions
6. Review and, where appropriate, renegotiate supply contracts
7. Strengthen Leadership
8. Right-size the workforce to an estimated 14,000 employees at NewCo
9. Strengthen industrial relations and internal alignment
10. Reskilling, job creation, and redeployment
11. Appropriate Government support on key initiatives
12. Continuous communication and stakeholder engagement

Will these works? It looks like a nice proposal.

To me, as an investor point of view, it might sounds like a good plan but the main thing is WHY NEED TO DE-LIST MAS TO DO THESE FEATURES? They can do these without de-listing MAS and offering just 0.27 to minority shareholders. 

Besides:

• These Can Be Done Long Time Ago 
• Not Really Something New ~ Most Ppl Knew About These Problems within MAS

REASON? TO ME ONLY ONE, THEY SEE THE OPPORTUNITY TO TAKE OVER AT A LOWER PRICE.

Based on new information, Khazanah have invested RM 7billions or RM 7.6billions to MAS.

a) RM 7billions scenario:

    Khazanah total shares                           11,592,389,200
    Cost per share                                                     0.604
    Revised cost per share                                     0.502 (-16.89% discount to Khazanah)
    (If offer 0.27 for remaining shares is accepted)

b) RM 7.6billions scenario:

    Khazanah total shares                           11,592,389,200
    Cost per share                                                    0.656
    Revised cost per share                                   0.537  (-18.14% discount to Khazanah)
    (If offer 0.27 for remaining shares is accepted)

They should offer 0.502 or 0.537 per share if that's what they believe MAS worth for??

By offering a price which is lower than what they have invested before, is a plus to them only, don't you think so?

Another interesting news:
"Kumpulan Wang Persaraan (KWAP) agreed to swap its RM750mil existing perpetual sukuk with ordinary equity, meaning that it will eventually become shareholder in MAS"
Why give KWAP the chance to choose to become a shareholder and not minority shareholders?

If Khazanah believe 0.27 is a good offer, why not they sell all their shares at 0.27 to other ppl or the minority shareholders? I believe many ppl will be interested with it, what do you think? ^_*

See below:

• RM 7billions/7.6billions + RM 1.4billions = RM 8.4billions/9billions to get 100% ownership of MAS
• MAS revenue RM 15.1billions 
• Latest financial statement shows only 5% reduction in revenue due to unfortunate incident 

• Etihad Airways pay Euro 1.76billion (approx. RM 8billions) for 49% stakes in Alitalia SpA. 
• Alitalia SpA revenue Euro 3.594billions (approx. RM 16billions) similar to MAS 

MAS is a cash generating company, that's why Khazanah not willing to sell their part?

Now all depends on the minority shareholders to vote.

To me:

• minority shareholders should accept the offer if you are having profit now or not willing to wait until end of 2014 or after that to cash in.

• minority shareholders should reject the offer if you are having loss now and no rush to cash in. Wait for a better offer from Khazanah.

Risk:
a) Khazanah take back their offer and let it face bankruptcy. Likely? To me the chance for this is minimum.

Lastly, no right or wrong in investment, only end results tell. No one shall control your ways of investment.

Good luck with your investment!!! ^_*

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