Bad news !!! Proposed reduction of RM0.90 of the par value of each existing ordinary share of RM1.00 each, proposed reduction of share premium account to be utilised towards setting off against the accumulated losses of MAS and to undertake a renounceable rights issue of new shares to raise gross proceeds of up to RM3,100 million (RM1334 mil for working capital, RM986 mil for capex, RM777 mil for repayment of borrowings).
Rationale !!! To show a stronger financial position moving forward and to improve liquidity and financial flexibility. (in short, to clean up the books).
Just when you thought it's safe to jump back to the water, the share plummeted to an all time low of 80 sens before closing at 84 sens. Further downside is still anticipated in the next few days. Among the significant sellers for the past 2 months, EPF disposes off more than 14+ million shares in the month of Oct and another 12+ million shares in Nov.
The share traded at its highest point in Feb 2012 when it announced a collaboration with AirAsia which did not materialize. Being a GLC, the counter had been a total flop and a major letdown. So, how do MAS reward and cool down its die hard investors. By giving some sweetener in the form of FREE flight vouchers (call them if you did not received) to compensate for all their LOSSES. Vouchers are NOT exchangeable for CASH.
Will this corporate exercise help MAS to recover and regain its past glory, will it be taken private or will this only prolong to inevitable death of MAS. If the business does not improve, losses will still be accumulated. Only time will tell.
Meanwhile, i'll leave you with a song by Eric Clapton - Tears in Heaven. This song was written in memory of his 4 1/2 years old son who died in a tragic accident when he fell out of an open bedroom window of the 53rd floor of a Manhattan apartment building.