Mas Business Model

Topics: Malaysia Airlines, Singapore Airlines, Airline Pages: 4 (806 words) Published: September 9, 2009
Malaysian Airline System Berhad

Widespread Asset Unbundling (‘WAU’) : The Business Model Restructuring of our National Airline A Report Card …

Brief description
BinaFikir was the Lead Advisor for the Widespread Asset Unbundling (‘WAU’) restructuring of Malaysian Airline System Berhad Restructuring involved ‘unbundling’ the airline of RM5bn of assets and RM7bn of liabilities, transforming MAS’s gearing ratio of 700% as at 31 March 2002 to a net cash position, thus creating an “asset-light” airline WAU is a financial restructuring which succesfully resolved MAS’s balance sheet problems and gave a strong platform for the management to focus on continued operational improvements Successfully executed by 6 November 2002 (being a record duration of 8.5 months for a restructuring of this magnitude) Awarded the Airfinance Journal Asian Corporate Finance Deal of the Year for 2002 and The Edge’s Deal of the Year 2002 Slide 2 of 6

Post-WAU results speaks for themselves
After WAU Before WAU

Year ended 31 March 2005 RM’m

Year ended 31 March 2004 RM’m

Year ended 31 March 2003 RM’m

Year ended 31 March 2002 RM’m

Operating profits/(loss) Profit/(Loss) before tax Profit/(Loss) after tax

317.7 364.5 326.1

195.6 345.2 461.1

(47.0) 336.6 339.1

(776.6) (846.5) (835.6)

WAU only took effect for last 5 months of this financial year (2003) and yet had a major effect to turn around MAS’s profit

Slide 3 of 6

Report card
Shareholder value triples (by RM 4.7 billion) on the back of WAU restructuring MAS Closing Share Price

Shareholder approval of WAU

MAS’ share price movements are illustrated in the chart above. As illustrated, the share price increased from RM 3.06 per share on 5 November 2002 upon shareholder approval of the WAU restructuring, and reached a high of RM 5.60 per share on 31 March 2004. This works out to an increase in market capitalization of RM 4.7 billion (market capitalization of RM 7.0 billion as of 31 March 2004...
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