By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on July 13, 2013
sharen@mediaprima.com.my
Published in NST on July 13, 2013
RAISING CAPITAL: Listing of subsidiary will be national carrier’s first
Malaysia Airlines (MAS) may sell Firefly Sdn Bhd shares to the public to raise capital in order to help expand the six year-old subsidiary’s business.
If the initial public offering (IPO) does take place, it will be the first time the national carrier lists a subsidiary.
Over the years, many of the carrier’s plans have outlined the need to list its profitable units to help raise capital and also to better manage it.
The closest it got thus far was the sale of MAS Catering Sdn Bhd to Brahim’s Holdings Bhd and LSG Asia GmbH in 2003.
Brahim’s and LSG paid RM175 million for MAS Catering, besides taking over the company’s accumulated losses. MAS had incurred losses of about RM200 million from the catering business.
The carrier has more than 30 subsidiaries and associate companies. Its profitable units include Malaysia Airlines Cargo Sdn Bhd and Firefly.
Firefly bled red ink in 2011 due to its shortlived jet operations but returned to the black last year. Prior to 2010, Firefly had been making around RM10 million to RM12 million in
net profit.
The company, which is targeting a revenue of RM350 million this year, currently contributes less than five per cent to MAS’ bottom line.
Analysts said MAS’ plan to list its subsidiaries is more of a balance sheet management exercise.
“If the market views MAS’ move to unlock the value of its subsidiaries as positive, the new listed entity will rally,” said Mercury Securities head of research Edmund Tham.
Firefly chief executive officer Ignatius Ong said the listing is in the scope of the company.
“One of the requirements for listing is to strengthen the company’s position. This is where the new ATR 72-600 aircraft comes in.
We are on an expansion mode,” he said. Last December, MAS ordered 36 ATR 72-600 turboprop planes from French-Italian aircraft maker ATR for RM3 billion. Of those, 20 are for Firefly and the rest for MASwings.
Firefly received its first ATR 72-600 earlier this week. The rest will be delivered in batches over the next three years.
“We are increasing frequencies in existing markets and identifying new routes,” Ong said on the sidelines of the launch of Firefly’s inaugural ATR 72-600 commercial flight to Johor’s Senai International Airport from Subang Skypark yesterday.
Firefly also operates 12 ATR 72-500s and flies to more than 25 destinations within Malaysia, southern Thailand, Singapore and Sumatra.
Malaysia Airlines (MAS) may sell Firefly Sdn Bhd shares to the public to raise capital in order to help expand the six year-old subsidiary’s business.
If the initial public offering (IPO) does take place, it will be the first time the national carrier lists a subsidiary.
Over the years, many of the carrier’s plans have outlined the need to list its profitable units to help raise capital and also to better manage it.
The closest it got thus far was the sale of MAS Catering Sdn Bhd to Brahim’s Holdings Bhd and LSG Asia GmbH in 2003.
Brahim’s and LSG paid RM175 million for MAS Catering, besides taking over the company’s accumulated losses. MAS had incurred losses of about RM200 million from the catering business.
The carrier has more than 30 subsidiaries and associate companies. Its profitable units include Malaysia Airlines Cargo Sdn Bhd and Firefly.
Firefly bled red ink in 2011 due to its shortlived jet operations but returned to the black last year. Prior to 2010, Firefly had been making around RM10 million to RM12 million in
net profit.
The company, which is targeting a revenue of RM350 million this year, currently contributes less than five per cent to MAS’ bottom line.
Analysts said MAS’ plan to list its subsidiaries is more of a balance sheet management exercise.
“If the market views MAS’ move to unlock the value of its subsidiaries as positive, the new listed entity will rally,” said Mercury Securities head of research Edmund Tham.
Firefly chief executive officer Ignatius Ong said the listing is in the scope of the company.
“One of the requirements for listing is to strengthen the company’s position. This is where the new ATR 72-600 aircraft comes in.
We are on an expansion mode,” he said. Last December, MAS ordered 36 ATR 72-600 turboprop planes from French-Italian aircraft maker ATR for RM3 billion. Of those, 20 are for Firefly and the rest for MASwings.
Firefly received its first ATR 72-600 earlier this week. The rest will be delivered in batches over the next three years.
“We are increasing frequencies in existing markets and identifying new routes,” Ong said on the sidelines of the launch of Firefly’s inaugural ATR 72-600 commercial flight to Johor’s Senai International Airport from Subang Skypark yesterday.
Firefly also operates 12 ATR 72-500s and flies to more than 25 destinations within Malaysia, southern Thailand, Singapore and Sumatra.
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