I read with great admiration the report card of BinaFikir Sdn Bhd with regards to the “Widespread Asset Bundling” (a.k.a. as “WAU”) restructuring of MAS. Incidentally, Tan Sri Azman Mokhtar and Mohammed Rashdan Yusof were co-founders of BinaFikir Sdn Bhd. During the WAU exercise, Tan Sri Mokhtar was the Managing Director and Mohamamed Rashdan Yusof was the chairman of BinaFikir Sdn Bhd.
BinaFikir Sdn Bhd was founded in 2002, in HERE. In January 2002 it has been commissioned to restructure MAS under the name of WAU. The WAU exercise was completed on 6-11-2002. The excerpts of the said report card are as follows:
- Restructuring involved ‘unbundling’ the airline of RM5bn of assets and RM7bn of liabilities, transforming MAS’s gearing ratio of 700% as at 31 March 2002 to a net cash position, thus creating an “asset-light” airline
- WAU is a financial restructuring which succesfully resolved MAS’s balance sheet problems and gave a strong platform for the management to focus on continued operational improvements
- Successfully executed by 6 November 2002 (being a record duration of 8.5 months for a restructuring of this magnitude)
- Awarded the Airfinance Journal Asian Corporate Finance Deal of the Year for 2002 and The Edge’s Deal of the Year 2002
“Following the Widespread Asset Unbundling (“WAU”) restructuring exercise in late 2002, many investors have much positive expectations on MAS to deliver improved performance. We believe this has been the single most important factor behind MAS’ strong relative share price performance vs. its peers in the region…MAS’ share price has consistently outperformed Singapore Airlines and Cathay Pacific” ECMLibra Analyst Report on MAS, 30th July 2004.
“WAU only took effect for last 5 months of this financial year (2003) and yet had a major effect to turn around MAS’s profit.”
The BinaFikir Sdn Bhd’s report card on WAU, in HERE.
I wonder how much did MAS pay BinaFikir Sdn Bhd for a job well done. Ten years later, Khazanah Nasional Bhd, under Tan Sri Azman Mokhtar, had to undergo negotiations for a share swap that was shrouded with secrecy with AirAsia in order to save the nation carrier, MAS. Tan Sri Azman should be applauded for his great efforts.
It was also coincidental that his former co-founder in BinaFikir Sdn Bhd, Mohammed Rashdan Yusof, who is also a Khazanah director, is now appointed to sit on MAS board. Henceforth, MAS should be flying high again. After this secretive MAS/AirAsia share swap, it will be interesting to wait and see MAS could hold on to its existing destinations and/or had to take up a big chunk of the 200 airbus that AirAsia has ordered.
Next posting will be on LSG Sky Chef Brahim Sdn Bhd, a company where a brother of high ranking politician has an interest.