Tuesday, 7 April 2020

Golden Skies Ventures (GSV) has made a $2.5 billion offer to take over Malaysia Airlines but the government remains skeptical

The privately held Golden Skies Ventures (GSV), a firm created by a few former Malaysia Airlines officials and aviation professional has made a surprising $2.5 billion offer to fully take over national airline of Malaysia - Malaysia Airlines.

In a phone interview with news agency Reuters, executives said “(We have secured) in excess of $2.5 billion from the bank. We will take about three to four months to get the long-term financing,” the official also claimed to have a commitment from a Japanese private equity firm who would inject immediate funds into the group based on an equity deal.

According to GSV it would keep the Malaysian Government's golden share which allows it majority voting rights to maintain the flag carrier status of the airline and would reinstate Malaysia Airlines as a premium long-haul airline by expanding the route network as was as greater utilisation of the firms fleet of some 81 aircraft. GSV would also continue to operate key other areas of business including cargo and maintenance divisions as well as the budget airline.  GSV says it will have enough funds to allow the airline to operate for up to 18 months. 

However, Khazanah Nasional, the sovereign wealth fund of the Government of Malaysia and the airlines only shareholder,  isn't sure at all that such a deal would come to fruition.  Managing director Datuk Shahril Ridza Ridzuan told local media that it would be cautious that any bank giving such finance at the moment in light of the current economic situation.  "Plus their original proposal relied 100 per cent on debt funding from third parties. They do not have any equity of their own," Shahril told the New Straits Times (NST) earlier.

GSV hasn't disclosed where the investment would come from,  which banks or financial institutions are involved and as yet no company or bank has confirmed a stake in GSV's proposal, which GSV said had been submitted to the bankers hired by Khazanah Nasional, Morgan Stanley. 

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