Najah Air Sdn Bhd, led by AirAsia Group co-founder and former chairman Pahamin Ab Rajab along with a group of businessmen, is eyeing SoftBank Group Corp as a seed investor to take over Malaysia Airlines, according to a report by The Edge.
Najah Air is said to have sought an appointment with SoftBank’s Masayoshi Son, although the development is still in its nascent stage.
Quoting sources, the report said Najah Air is confident that it will get SoftBank to back its turnaround plan for the national carrier as the Japanese firm is an investor in transport-related tech companies including Grab, Uber, China’s Didi Chuxing and India’s Ola.
Noting that technology will play an important role in its turnaround plans, Najah Air said it aims to transform Malaysia Airlines into a low-cost, full-service carrier while the national carrier’s sister airline Firefly will become the region’s first ultra-low-cost carrier focusing on millennial consumers.
On Monday, the aviation company is said to be seeking 1 billion ringgit ($240 million) from a Japanese lender to take over Malaysia Airlines Bhd, which is currently solely owned by the country’s sovereign wealth fund Khazanah Nasional Bhd.
Pahamin and a group of businessmen had met Malaysian Prime Minister Mahathir Mohamad to express their interest in turning around the ailing national carrier. Najah Air plans to take up minority stake in Malaysia Airlines in a debt-for-equity swap and wants countrol of the board and management.
Besides Najah Air, Weststar Group is also said to be one of the forerunners to bid for Malaysia Airlines and is in preliminary talks with Najah Air to jointly take over the airline. Qatar Airways is also said to have sent a proposal for the bid.
Mahathir, who is also the chairman of Khazanah, said he received four proposals – mostly from local entities – to rescue Malaysia Airlines, though no decision has been made yet. He laid two conditions for interested parties to take over the airline – to preserve the airline’s national identity and that the takeover should not result in any retrenchment.
The government, Mahathir added, is also willing to give up its majority stake in Malaysia Airlines, though it will ensure that it still “has a say” in the running of the airline.
This March, a local lawmaker had suggested AirAsia co-founder and group CEO Tony Fernandes should be given a shot to help revive Malaysia Airlines and there was speculation on whether the government will revisit the proposal on share swap between the controlling shareholders of both airlines.
Fernandes had then said he is not keen on taking over the national carrier as he is looking to focus on turning AirAsia into a digital business.
In August 2011, both AirAsia and Malaysia Airlines had agreed to a share swap deal that would have seen Malaysia’s sovereign wealth fund Khazanah Nasional Bhd transfer its 20.5 per cent in Malaysia Airlines to Tune Air, the parent company of AirAsia, in exchange for 10 per cent of the budget airline.
However, the share swap deal was called off in 2012 due to trade union concerns over restructuring and job cuts in the wake of the deal.
Malaysia Airlines has repeatedly sought to turn itself around since it was privatised for 6 billion ringgit ($1.47 billion) by Khazanah in 2014. In the same year, the national carrier has been grappling with poor international reception after being the centre of two aviation tragedies – the disappearance of MH370 and the shooting down of MH17.
Earlier this year, the $33-billion sovereign wealth fund demanded that the airline produce a turnaround plan.
Its managing director Shahril Ridza Ridzuan said the fund’s investment in the airline remains relevant despite the loss-making airline missing its target to breakeven last year, causing the fund a 7.3 billion ringgit ($1.78 billion) impairment loss.