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Privatisation can enhance MAHB's competitiveness, efficiency: Analysts

Publish date: Thu, 16 May 2024, 05:39 PM

KUALA LUMPUR: The planned privatisation of Malaysia Airports Holdings Bhd (MAHB) will further enhance its competitiveness and consequently stimulate economic growth through its network of airports, analysts said.

They also said given the exercise has its merit as it is backed by Malaysia's well-regarded sovereign wealth fund and provident funds.

A consortium led by Khazanah Nasional Bhd and the Employees Provident Fund (EPF) on Wednesday made a voluntary conditional offer to take over all 1.12 billion outstanding shares of MAHB for about RM12.3 billion or RM11 each.

The consortium called Gateway Development Alliance (GDA) also consists of Abu Dhabi Investment Authority (ADIA) and Global Infrastructure Partners (GIP), one of the world's leading infrastructure investors with experience in owning and managing airports.

Putra Business School economic analyst Associate Professor Dr Ahmed Razman Abdul Latiff said the privatisation can enhance MAHB's competitiveness and efficiency.

He said considering the potential increase in tourists and air traffic in Malaysia, MAHB is expected to remain competitive, thereby attracting foreign investors to invest in the company.

"This will benefit other local companies to attract international investors, thereby contributing to Malaysia's economic growth," he told Berita Harian.

UniKL Business School economic analyst associate professor Dr Aimi Zulhazmi Abdul Rashid said the participation of ADIA and GIP shows that Malaysia remains an attractive destination for foreign direct investment (FDI). 

He said MAHB is a strategic national asset with air gateways nationwide and an airport in Turkey. Hence, changing its status to a private company can lead to a more thorough and controlled planning for further development.

"The government still controls MAHB through the EPF and Khazanah, which will hold the majority, while the holdings by the two foreign investors are at a combined 30 per cent. FDI approvals like this are not easily achieved, especially involving the ownership of strategic national assets," he added.

Affin Hwang Investment Bank Bhd said the proposal may attract public scrutiny as airports are critical infrastructure and enablers of economic activity, which are generally viewed as strategic assets.

"That said, the privatisation exercise is led by Khazanah and EPF, which are Malaysia's well-regarded sovereign wealth fund and provident funds respectively, and backed by GIP that has extensive airport operation and management expertise. These should raise the merits of the proposal and help to ease some public concerns," it added.

Once the offer is fully completed, Khazanah will increase its ownership in MAHB from 33.2 per cent to 40 per cent, while the EPF from 7.9 per cent to 30 per cent.

Collectively, Malaysian investors will own 70 per cent of MAHB shares, while ADIA and GIP will have the remaining 30 per cent.

The government will retain its special shareholding in MAHB, and the chairman and chief executive officer will continue to be appointed from among Malaysians.

MAHB is among the world's largest airport operator groups in terms of the number of passengers handled. 

It manages and operates 39 airports in Malaysia and one international airport in Istanbul, Turkey.

The airports it operates in Malaysia consist of five international airports, 16 domestic airports and 18 short take-off and landing airports.

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