The Star Online: Business
The Star Online: Business |
- DRB-HICOM, Volkswagen likely to share control in Proton
- CEO sets in motion business plan to bring airline to profitability by 2013
- GM rejects Saab ownership plan
| DRB-HICOM, Volkswagen likely to share control in Proton Posted: 07 Dec 2011 03:58 PM PST PETALING JAYA: DRB-HICOM Bhd's bid for control over Proton Holdings Bhd is likely to include the presence of Volkswagen AG at a later stage, a reliable source said. DRB-HICOM's plan is to first secure a controlling block in Proton. But at a later stage or second phase of the deal, DRB would divest some of its equity to Volkswagen, resulting in both parties sharing control and management in Proton, the source said. Such a structure could make the deal more desirable, considering that it moved away from the prospects of Proton falling into the hands of a foreign party, an issue which was likely to have been part of the reasons why previous attempts by Volkswagen to buy into Proton were scuttled. Volkswagen declined to comment while DRB-HICOM could not be reached for comment. The market is rife with speculation that Khazanah Nasional Bhd has received a number of bids for a controlling stake in Proton. Khazanah owns 42.7% in Proton. Another source close to the matter said Khazanah had yet to make a decision on the Proton deal and that meetings would be held this week between key stakeholders to discuss the matter. The source also said there was a possibility that the sale of the stake in Proton might be called off temporarily. "Whatever the case, there is likely to be more clarity within the next few weeks on whether a deal is going to take place," said the source. Khazanah was in negotiations with Volkswagen AG, but the talks broke down in late 2007. DRB-HICOM had previously approached Proton in 2009 and formally submitted a bid to buy 32% of Proton shares. After the talks with Proton broke down, Volkswagen partnered instead with DRB-HICOM in late 2010 to assemble and manufacture Volkswagen vehicles in Malaysia. Proton shares have been actively traded in recent days on speculation that Khazanah was poised to divest its stake inthe national carmaker. Some insiders reckoned that bidders might only be interested to own less than 33% stake in Proton, which meant that minority shareholders would not get bought out in the deal. Volkswagen's involvement in Proton may also make DRB-HICOM's deal more attractive, considering that analysts have stated that what Proton needed was a partnership with an established auto manufacturer with technological capabilities. Full content generated by Get Full RSS. |
| CEO sets in motion business plan to bring airline to profitability by 2013 Posted: 07 Dec 2011 03:57 PM PST PETALING JAYA: Malaysia Airlines (MAS) will cut unprofitable routes, spin off its ancillary units, explore joint ventures with other airlines and launch a regional carrier by second half of next year in a bid to return to profitability by 2013. The airline, which will focus on offering premium air services, targets a net loss of RM165mil for 2012. However, by 2016 it hopes to report a net profit of RM900mil. About 40% of MAS' network is unprofitable but beginning next year it would cut capacity by 12% and save about RM302mil by suspending flights to Dubai, Cape Town, Johannesburg, Buenos Aires and some European cities. It would focus on serving the premium market in Asia where there is growth despite the intense competition from low-cost and premium carriers that are also adding capacity in the region. "We are very deep in crisis. Our cumulative losses until the third quarter amounted to RM1.25bil and we do not see any improvements in the fourth quarter. MAS needs to make hard and unpopular decisions simply to survive. We hope this plan will set the course straight," MAS group chief executive officer Ahmad Jauhari Yahya told a press conference yesterday. The new business plan that he unveiled yesterday focused on reversing the airlines' fortunes and outlined steps to sustain its performance. He cited the loss of focus of the premium segment, declining product quality, an ageing fleet as reasons why MAS was in a loss-making situation. The airline's overall ranking in the industry had also dropped but with the new business plan, there would be greater focus to win the customers back. Ahmad Jauhari said the series of actions that the airline would take next year was expected to generate an improvement of between RM1.1bil and RM1.5bil in the profit impact for the group. On the new premium carrier - not Sapphire he said it would begin operations in the second half of 2012 with a fleet of 45 B737-800 aircraft. It would fly to cities in South-East Asia and Greater China while MAS would continue to serve long-haul flights. It planned to add frequency to cities like Manila, Jakarta and Tokyo. This is the fourth time in a decade that MAS is being restructured, though the theme this time is be a leaner airline, but some analysts attending the briefing were unimpressed. "It seems their consultants did the work for them and we are disheartened by the fact that the management only aspiresfor RM900mil net profit when benchmarked against first-tier airline, they should be aiming for RM2bil to RM3bil," said an analyst. A Maybank Investment analyst added: "It is a strategic mistake to set up a new airline when they could service the short-haul routes using the MAS brand name. Why the need to gamble when there is no guarantee of immediate success? However, what is convincing is that they are suspending flights to unprofitable destinations." MAS has also begun discussions with AirAsia and AirAsia X to cooperate on fuel-purchasing, maintenance, training and ground-handling, which could save the national carrier RM100mil annually. On the rationale to spin the ancillary units engineering, pilot training/safety academy, cargo and ground services Ahmad Jauhari said it was to allow strategic investors to take a stake in them so that the units could grow. The airline will take delivery of 23 new aircraft including five A380 in 2012 and that would help the airline save RM392mil in cost since the new aircraft are more fuel efficient. The airline also needed to raise RM12bil to pay for the new aircraft it had ordered till 2014 and it might finance them via debt and Islamic bonds but MAS deputy CEO Mohd Rashdan said the airline would not opt for a cash call. MAS has cash reserves of RM1bil now but it expects return of aircraft deposits to help it ride through next year. "We would not deny we are in talks with Qantas as these days you have to work with other airlines but the discussions are still at an exploratory stage," he said, adding that: "We are exploring the possibility of joint ventures with (other) partners in order to serve multiple markets together, while reducing the financial risks of going alone." The airline will also join the oneworld air alliance by September 2012. Asked if the MAS workforce was behind him in the push for better fortunes, Ahmad said: "They understand the gravity (of the problem) and are horrified by the losses, but they also understand that painful actions are necessary." Asked if there would be job cuts, Ahmad said it depended on all the spin-offs but a (voluntary separation scheme) was the last option. There is also apprehension towards the comprehensive collaboration framework from with AirAsia. Asked if the CCF was really necessary, he said "it makes it easier with the CCF.'' Full content generated by Get Full RSS. |
| GM rejects Saab ownership plan Posted: 07 Dec 2011 03:45 PM PST Thursday December 8, 2011DETROIT: General Motors Co says it will not support a proposed ownership structure for Saab that includes a Chinese bank, moving the Swedish car company closer to liquidation. "We have reviewed Saab's proposed changes regarding the sale of the company," GM spokesman James Cain said in a statement. "Nothing in the proposal changes GM's position. We are unable to support the transaction." – Reuters |
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