Datuk Kamarudin Meranun, Tan Sri Azman Mokthar, Tan Sri Md Nor Yusof, Tan Sri Tony Fernandes, Mohd Rashdan Mohd Yusof and Datuk Sri Nazir Razak at the MAS-AirAsia signing ceremony
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.
Tony Fernandes called the deal “something very special” today. — Picture by Jack Ooi
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 that 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
comments
Both airlines will see their profit soar on the removal of competition, however for the consumer like us, no more super cheap fares on the no frill segment. this kind of integration does not benefit us, more like a monopoly game
I smell rotten fish when the deal involves Nasir of CIMB who is the brother of the PM. I hope EPF is not involved directly or indirectly. The restructuring and or merger involves hidden hands with the tacit approval of the PM.
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