Malaysia Airlines Shares De-Listed; To Be Privatized

Shares of Malaysia Airlines, the notorious government-owned airline which recently grabbed headlines for two major plane crashes, have been suspended from the Malaysian Stock Exchange after the government sent a formal request to the trading platform to delist its shares.

The government of Malaysia also announced that it was planning a complete restructuring of the flagship carrier to keep it afloat in the airline industry, part of which will involve taking it private.

State-run Khazanah Nasional, the major stake-owner of Malaysian Airlines, announced that it would buy back all the shares it does not own, about $470 million, to take the airline private. It also announced that details of a restructuring plan would be announced by the end of August.

"We reiterate that the proposed restructuring will critically require all parties to work closely together to undertake what will be a complete overhaul of the national carrier on all relevant aspects. Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity," Khazanah was cited by The Sydney Morning Herald.

Malaysian Prime Minister Najib Razak said that "This process of renewal will involve painful steps and sacrifices from all parties," and called for support from all parties, The New York Times reports.

"We believe our national carrier must be renewed. This means wholesale change, to deliver a wholly different outcome. Only through a complete overhaul of the company can we deliver a genuinely strong and sustainable national carrier. Piecemeal changes will not work," he added.

Malaysian Airlines has been experiencing an unfortunate streak of losses, even before the plane crashes. As private airlines took over the air travel market, the government-run airlines found itself struggling to fill up its seats. It started offering steep discounts on its fares and that saw its revenues dwindle down, according to The Wall Street Journal.

The plane crashes just made it worse. Flight 370 mysteriously disappeared in March and is still being searched for in the southern Indian Ocean. The mishap hardly left the headlines when a second airplane, Flight 17 was shot down over Ukraine, killing more than 300 people.

The delisting and privatization of Malaysian Airlines wasn't a surprise for investors. They had apparently expected the government to make the move.

"This is the sensible way forward given that massive surgery is required," Christopher Wong, a senior investment manager at Aberdeen Asset Management Asia told Reuters.