Khazanah sceptical about GSV's US$2.5b offer for MAS

Kuala Lumpur

MALAYSIAN sovereign wealth fund Khazanah Nasional Bhd, the sole owner of Malaysia Airlines, is sceptical about a US$2.5 billion proposal by privately held Golden Skies Ventures (GSV) to acquire the national carrier, the New Straits Times daily reported.

The newspaper quoted managing director Shahril Ridza Ridzuan as saying he was "cautious" about whether GSV had sufficient financial backing given the risk aversion that has hit the airline industry amid the coronavirus pandemic.

GSV told Reuters on Monday it has secured funding in excess of US$2.5 billion from a European bank and that it would take three to four months to get long-term financing. It submitted its proposal last month to Morgan Stanley, which Khazanah has hired to manage the airline's search for a strategic partner.

GSV also said it has a commitment from a Japanese private equity firm to inject immediate funds into the aviation group through an equity deal. It declined to the name the European bank or the Japanese private equity firm but said it was in talks with more firms about funding.

A Khazanah spokesman confirmed Mr Shahril had made the comment to the newspaper, adding that the sovereign wealth fund had received several proposals from various parties.

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"In evaluating these proposals, emphasis is given on the respective investment structure of the proposals concerned. A structure that is dependent on heavy borrowings could jeopardise financial sustainability and add to the risk of failure in the future," he said.

GSV was set up by former Malaysia Airlines officials and professionals with aviation experience. REUTERS