Malaysia Airlines will be taken entirely into state hands after the loss of two aircraft in four months left hundreds of people dead and set the company's share price tumbling.
The rescue plan will result in the airline being nationalised and entirely restructured, with Malaysia's state investment firm announcing that it would carry out a "complete overhaul".
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Malaysia's sovereign wealth fund, Khazanah Nasional, which already owns a 69 per cent stake of the business, said it would buy out minority shareholders in a "selective capital reduction and repayment exercise," the Financial Times reports. Khazanah has offered to pay 0.27 ringgit (5p) per share, a 12.5 per cent premium to the closing price on Thursday.
Malaysia hopes to rescue the struggling airline, which is not only one of the oldest in Asia but also "an emblem of the southeast Asian country’s rapid industrialisation in the 1980s", the FT says.
The carrier was already in difficulties after flight MH370 disappeared en route from Kuala Lumpur to Beijing on 8 March, triggering one of the largest and costliest searches in aviation history. Last month, another Malaysia Airlines flight, the MH17, crashed in eastern Ukraine, apparently having been shot down.
A total of 537 people died in the two disasters, 239 on MH370 and 298 on MH17.
The crashes caused considerable "reputational damage" to the airline, the BBC notes, including a 60 per cent drop in sales from China.
Even before the two disasters, the Malaysian flagship carrier's financial performance "was among the worst in the industry", The Guardian reports.
Khazanah, which is chaired by the Malaysian Prime Minister, Najib Razak, is now expected to cut jobs, appoint a new management team and sell off the carrier's profitable assets, such as its airport services and budget airline subsidiaries, The Guardian says.
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