MAS and AirAsia Shares Swap

[flee 5]

Azmil out of MAS in share swap with AirAsia

 

KUALA LUMPUR, Aug 9 — MAS managing director Tengku Datuk Azmil Zaharudin lost his job today after the airline’s shareholders finalised a share swap with Asia’s largest low cost carrier, AirAsia.

The Malaysian Insider understands that an executive committee led by Tan Sri Md Nor Yusof will manage the state carrier until a new CEO is appointed while day-to-day operations will be handled by Khazanah Nasional Bhd executive director and MAS board member, Mohd Rashdan Mohd Yusof.

 

The executive committee will comprise of Datuk Mohamed Azman Yahya, Rashdan, Tan Sri Tony Fernandes and Datuk Kamarudin Meranun.

 

Azmil will join Khazanah as an executive director effective September 12, 2011.

 

Under the share swap, AirAsia’s main shareholder Tune Air Sdn Bhd will swap 10 per cent stake in the budget carrier for 20.5 per cent share of the ailing flag carrier in the agreement called a “Comprehensive Collaboration Framework.”

 

Before the share swap, Tune Air was the biggest shareholder in AirAsia with 26.28 per cent stake while Khazanah held a total of 69.33 per cent share of MAS.

 

The MAS board will also see some new faces, namely Land & General Bhd founder, Tan Sri Wan Azmi Wan Hamzah, former IJM chief executive Datuk Krishnan Tan, Astro chief executive Datuk Rohana Rozhan and David Lau from Shell Malaysia, who will act as independent non-executive directors.

 

Fernandes and Kamarudin, on the other hand, have been appointed as non-independent non-executive directors of MAS.

 

Rashdan, popularly known as Danny, was part of the BinaFikir consultancy that engineered the wide asset unbundling (WAU) restructuring that made MAS a virtual airline in 2002. BinaFikir was then led by Tan Sri Azman Mokhtar, who is now managing director of Khazanah, the majority shareholder in MAS.

 

CIMB Bank was appointed as advisor to the deal.

 

CIMB Group CEO Datuk Seri Nazir Razak said at the press conference that the collaboration would align shareholders and create synergies between the two airlines.

 

He added, however, that there is no commitment to collaborate until an analysis is completed to ensure that the deal does not contravene any global anti-trust laws.

 

The collaboration agreement comes into immediate effect for a period of five years with an option for a further five years.

 

The two airlines will also share common directors as Tan Sri Tony Fernandes, Datuk Kamarudin Meranun, Azman and Rashdan will be members of both boards.

 

Malaysia Airlines chairman Nor Yusof said that no timeframe has been determined to appoint a new CEO but a search is ongoing.

He said that Tengku Azmil was being replaced as CEO as they were looking at a new approach for the national carrier and therefore needed a new team.

 

A joint collaboration committee will be chaired by Azman while an advisory panel chaired by former prime minister Tun Abdullah Ahmad Badawi will be set up to ensure that all parties operate in the interest of the public and consumers.

 

Fernandes said that the tie-up between the two airlines was a “fantastic step forward.”

 

“I assure the Malaysian public this is something very special,” he said.

 

“I hope you (Malaysia Airlines staff) will now take down my picture with all the darts on it,” he quipped in reference to the traditional rivalry between the two carriers.

 

He added that the airlines would not scale back their respective plans for expansion.

 

Azman said that the two airlines will remain separate with separate brands and cultures.

 

“The idea is for the two airlines to focus on core competencies,” the Khazanah managing director said.

 

Nazir said that the swap price used was the closing prices for the shares on August 5 which gives a swap ratio of 2.05.

 

“It is a coincidence as the deal was also done at 2.05 am at One World Hotel (in Bandar Utama) on Sunday,” he revealed.

 

Under the deal, MAS shareholders would get one AirAsia warrant for every 30 MAS shares while AirAsia shareholders would get one MAS warrant for every 10 AirAsia shares.

 

Source: http://www.themalaysianinsider.com/malaysia/article/azmil-out-of-mas-in-share-swap-with-airasia/

[CH Teo 0]

Yea, Firefly just cannot be regional with turboprops only...

[Ikman Ikreza 0]

From words circulating, FY is not going to be axed, rather its going to be relabeled as a regional carrier - ala silk air.

 

so in one swoop, we have SQ in Malaysia

 

Premium longhaul = MH = SQ

Regional = FY = MI

Budget = AK = TR

Budget longhaul = D7 = unnamed

 

my biggest question is - is the malaysian domestic consumer going to be screwed?

I mean,no news on how its going to be like, but word online said that AK is to take the domestic route.

 

FAX again?

 

How about MASwings operation?

[Mohd Suhaimi Fariz 2]

Where do you get these thingS? Tan Sri Merican exCEO of Petronas reached his mandatory retirement age and was immediately snapped up by a Singapore O&G conglomerate. I dont call that falling by the "wayside"

 

Well, my source was my uncle who's in Petronas. Just because one reaches retirement age doesn't mean he's not held on as advisor.

[Nik H. 3]

Azmil will join Khazanah as an executive director effective September 12, 2011.

 

Nice. Very Nice indeed. Screw your job at MH and be rewarded with ED in Khazanah. Mediocrity has its rewards.

[jackch747 0]

FY, regional full service carrier?

 

This is getting worse.

[CH Teo 0]

Now really wandering what's the government position for MASwings operation? This is essential for Borneo folks...I hope no FAX back into existence, unless they can have the same level as Air Asia had now...

[J Chong 0]

Why is the ex-PM involved now? Need more pocket money?

[BC Tam 2]

..... Tan Sri Tony Fernandes and Datuk Kamarudin Meranun as non-independent non- executive directors of MAS

..... the establishment of an executive committee to be chaired by Tan Sri Md Nor Yusof. The exco will comprise of Datuk Mohamed Azman Yahya, Mohammed Rashdan Mohd Yusof, Tan Sri Tony Fernandes and Dtk Kamarudin Meranun.

 

The exco wil oversee the management of the company until such a time when a new managing director is appointed.

Well, here you have proof there is always more than one way to skin a cat

[flee 5]

Nice. Very Nice indeed. Screw your job at MH and be rewarded with ED in Khazanah. Mediocrity has its rewards.

Perhaps Khazanah wants to keep an eye on his activities. Left outside, he may do damage to their MH rescue plan. Better to have him inside (where he can be monitored) than running riot in the wild?

[flee 5]

Bursa Malaysia Announcements:

 

AirAsia:

 

Warrants Issue

 

Collaboration Agreement

 

MAS:

 

Warrants Issue

 

Collaboration Agreement

 

Now really wandering what's the government position for MASwings operation? This is essential for Borneo folks...I hope no FAX back into existence, unless they can have the same level as Air Asia had now...

The focus of this deal is on Firefly as they are "wasting" AK's and MH's resources because it competes with both of them. Firefly is being repositioned as a regional full service carrier and will no longer be a LCC.

 

I don't think MASWings' role will see many changes.

[Waiping 12]

Wonder if this has anything to do with the Asean Open Sky policy? It's still on schedule to be implemented in 2015, right?

[flee 5]

Some thoughts on the MAS-AirAsia swap — Ali Kadir

 

 

AUG 9 — The dust has not settled on the MAS-AirAsia swap deal designed we are told to save the Malaysian icon which is on the brink of financial ruin.

 

It is perhaps an opportune moment to make some early observations about this deal.

 

1. What do Tajuddin Ramli and Tengku Azmil have in common?

 

Both of them presided over the financial collapse of Malaysia Airlines (MAS) and both are still being rewarded.

 

Tajuddin by the simple fact that despite the police concluding that he could be charged with wrongdoing, he is still walking around town, wealthy and living the good life.

 

Now I read in The Malaysian Insider that Tengku Azmil has been removed as managing director of MAS but will be rehired as a senior director with Khazanah Nasional, the sovereign wealth fund of the country.

 

This is why this country is such a mess: there is no accountability. You can cause the financial ruin of an icon but are rewarded with a sweet deal.

 

And by the way, since we are on the topic of accountability and responsibility, wasn’t Azman Mokhtar of Khazanah Nasional the brains behind the restructuring of MAS when he was at BinaFikir?

 

Wasn’t he adamant about taking on AirAsia? Didn’t he know that the business model of MAS was broken?

 

Isn’t he culpable for what has happened at MAS?

 

I find it interesting that his sidekick at BinaFikir, Rashdan Yusof, is now in charge of daily operations at MAS. I guess there is no downside in getting it really wrong in Malaysia.

 

2. I have to wonder what is the use of the Transport Ministry portfolio and the people at Khazanah Nasional and EPF and the Ministry of Finance and the Economic Planning Unit.

 

The demise of MAS did not happen overnight. The company has been in the ICU for more than 10 years but has been revived with some cost-cutting measures.

 

Now we are told that actually the company needs an operational overhaul. And it needed more than 10 years for someone to figure this out!

 

That MAS could not survive on its current business model. What happened to expensive consultants hired by Khazanah Nasional?

 

There was a time when we could trust the brainpower of the people in government. Now we just hope they can minimise the screw-ups.

 

* Ali Kadir reads The Malaysian Insider.

 

* This is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.

 

Source: http://www.themalaysianinsider.com/sideviews/article/some-thoughts-on-the-mas-airasia-swap-ali-kadir/

[CH Teo 0]

Flee, thanks for info.

Waiping, I think no change on that; 2015.

 

"Firefly is being repositioned as a regional full service carrier and will no longer be a LCC."

 

I think this would most probably means not so yielding routes being given to FY from MH, just like SQ and MI...

[Nik H. 3]

Perhaps Khazanah wants to keep an eye on his activities. Left outside, he may do damage to their MH rescue plan. Better to have him inside (where he can be monitored) than running riot in the wild?

 

No Flee.

 

Tengku Azmil is a very nice man. He is also very diligent and honest. He has a pleasant demeanor and always polite. Probably ideal son-in-law material. He will not damage MH out of spite. Leaving him out there to fend for himself would not damage MH. He is also not predatory by nature. And, with the salary he has been drawing all these years, his family will not go hungry even if he elects to take an extended vacation.

 

The poor man was thrusted to his job when the Government headhunted Idris Jala. He was not ready. He is great No.2 material, but command of an Airline puts him in an environment he cannot handle. His judgement in people is poor, his management style is very much paper driven and on the rare occasion he goes gung-ho it ends up poorly. His trust in some of his closest advisers is also another reason for his downfall. He is easy prey for the experienced MSpowerpoint light show clan, and his diligence with figures at times clouds judgement when it comes to taking risky decisions.

 

Unlike Charismatic Idris Jala, communications is not Tengku's strong point, his salesmanship poor, and frequently avoid making quick decisions. I'm sure he knows he is not doing a good job while trying to do it. Letting him go is already an act of mercy. He is a big boy, bestowed with a few titles, one inherited.

 

He can fend for himself.

[flee 5]

Thanks for the insight, Capt Nik. Highly interesting.

 

So, he is being treated like a typical civil servant - total job security till retirement age.

 

Tony dismisses fears of higher fares from MAS-AirAsia tie-up

 

KUALA LUMPUR, Aug 9 — The collaboration between AirAsia and Malaysia Airlines (MAS) will not result in reduced competition and higher fares, AirAsia chief Tan Sri Tony Fernandes said today.

 

The AirAsia group CEO said in a press conference following the announcement of the strategic collaboration that public fears that the tie-up would result in route rationalisation to reduce competition were unfounded.

 

“Does this mean that competition is less and fares are going up? I don’t think there is anything to worry about,” he said.

 

He added that AirAsia was built on low fares as that was the only way it could survive.

 

“The whole philosophy at AirAsia is low fares; our religion is low fares,” he said.

 

The outspoken airline industry captain also pointed out that the Asean open skies agreement will be coming into effect in 2015 which would liberalise air travel within the region.

 

“There are routes on which we are the only operator yet if you look at our fares, they keep going down,” he said.

 

Members of the public, however, have been wary that a collaboration, which includes the controlling shareholders swapping significant stakes in both airlines, could lead to an industry cartel and limit consumer choices.

 

MAS fares had become more competitive on routes on which it competes with AirAsia, such as to Sabah and Singapore, and some worried that the tie-up would take away the option of “flying a full service carrier at low-cost carrier prices.”

 

Analysts have also pointed out that such an arrangement could even be considered illegal in some countries due to anti-trust laws.

 

CIMB Group CEO Datuk Seri Nazir Razak, whose bank is advisor to the deal, said in the same press conference today, however, that the collaboration would not take into effect until an analysis is done on whether it violates any anti-trust laws worldwide, which was important as the airline industry is a global one.

 

Khazanah managing director Tan Sri Azman Mokhtar added that Malaysia’s competition law will come into effect on January 1 next year which should add an additional layer of consumer protection.

 

Asked whether having Fernandes on the MAS board would constitute a conflict of interest, MAS chairman Tan Sri Mohd Nor Yusof admitted that it was an “interesting challenge” for the collaboration committee to manage.

 

Under the share swap unveiled today, AirAsia’s main shareholder Tune Air Sdn Bhd will swap a 10 per cent stake in the budget carrier for a 20.5 per cent share of the ailing flag carrier in the agreement called a “Comprehensive Collaboration Framework.”

 

Before the share swap, Tune Air was the biggest shareholder in AirAsia with a 26.28 per cent stake while Khazanah held 69.33 per cent of MAS.

 

Source: http://www.themalaysianinsider.com/business/article/tony-dismisses-fears-of-higher-fares-from-mas-airasia-tie-up/

[Sharil Abdul Rahman 0]

No Flee.

 

Tengku Azmil is a very nice man. He is also very diligent and honest. He has a pleasant demeanor and always polite. Probably ideal son-in-law material. He will not damage MH out of spite. Leaving him out there to fend for himself would not damage MH. He is also not predatory by nature. And, with the salary he has been drawing all these years, his family will not go hungry even if he elects to take an extended vacation.

 

The poor man was thrusted to his job when the Government headhunted Idris Jala. He was not ready. He is great No.2 material, but command of an Airline puts him in an environment he cannot handle. His judgement in people is poor, his management style is very much paper driven and on the rare occasion he goes gung-ho it ends up poorly. His trust in some of his closest advisers is also another reason for his downfall. He is easy prey for the experienced MSpowerpoint light show clan, and his diligence with figures at times clouds judgement when it comes to taking risky decisions.

 

Unlike Charismatic Idris Jala, communications is not Tengku's strong point, his salesmanship poor, and frequently avoid making quick decisions. I'm sure he knows he is not doing a good job while trying to do it. Letting him go is already an act of mercy. He is a big boy, bestowed with a few titles, one inherited.

 

He can fend for himself.

 

So its the men that is ruining MAS, rather than the Man?

[KK Lee 5]

Tengku Azmil is a very nice man. He is also very diligent and honest. He has a pleasant demeanor and always polite. Probably ideal son-in-law material. He will not damage MH out of spite. Leaving him out there to fend for himself would not damage MH. He is also not predatory by nature. And, with the salary he has been drawing all these years, his family will not go hungry even if he elects to take an extended vacation.

 

The poor man was thrusted to his job when the Government headhunted Idris Jala. He was not ready. He is great No.2 material, but command of an Airline puts him in an environment he cannot handle.

 

Believe he was promoted to executive PM/RM’s wish as his ex-boss didn’t yield.

 

Learned the rank and file at MH are unhappy, industrial action was mooted, however, unlikely to be carried out.

[Alan B. 5]

Wow I'm amazed at how easy it is to hit the keyboard and past judgement on people. Unless you have the privilege of knowing all the facts first hand, it's better to just keep your judgemental comments to yourselves.

[Azman MN 1]

I once discussed a job in Khazanah with the Azmans.

 

Very tempting - they were willing to do a quite a lot to drag me out of Switzerland. Then slowly I saw that I would just be a puppet. I mean, nice for them to show another "top" malay guy with international experience, yada yada, but then I would have to expect calls in the middle of the night telling me what decisions to make the next day.

 

Some people would love to have that kind of job (although in name only) and package, but my Swiss package is not bad and I am my own man...

 

Anyway, with Khazanah, I fear that making an airline successful is only one of their multiple agendas...

[KK Lee 5]

Wow I'm amazed at how easy it is to hit the keyboard and past judgement on people. Unless you have the privilege of knowing all the facts first hand, it's better to just keep your judgemental comments to yourselves.

 

It is almost impossible to have the facts first hand unless one is a party to it. However, so far 90% of rumours have some truth in it

[Lock SH 0]

In 'BOLEHLAND' rumours on the street is far more accurate than the 'fully scripted-produced-to-please' official report.

 

 

[Alan B. 5]

It is almost impossible to have the facts first hand unless one is a party to it. However, so far 90% of rumours have some truth in it

 

My comment was more about the assumptions being made about the "failure" or leadership qualities of individuals.

[flee 5]

Wow I'm amazed at how easy it is to hit the keyboard and past judgement on people. Unless you have the privilege of knowing all the facts first hand, it's better to just keep your judgemental comments to yourselves.

We do this all the time, e.g. we have our opinions about our ministers or PM.

 

I guess that when you are a high flyer, you are public property. So brickbrats and bouquets come by frequently and regularly! It is part and parcel of the job.

 

A forum cannot be a forum if everybody is silent and dare not venture an opinion. And BTW, it is also good that your opinion is voiced. That shows that this forum has a group of people with a diverse range of opinions - good for healthy discussions.

Edited August 9, 2011 by flee

[Naim 6]

What a sombre & serious thread, why not go HERE for change?