Malaysian Airline shares sink to record low on rights plan
KUALA LUMPUR (REUTERS) - Shares in Malaysian Airline System Bhd (MAS) tumbled more than 20 per cent to an all-time low on Wednesday as the national carrier's 3.1 billion ringgit (S$1.2 billion) rights issue plan triggered fears of share dilution and uncertainty over the move.
Mr Ahmad Jauhari, chief executive of Malaysia's national carrier, said in a statement to the stock exchange late on Tuesday that the rights issue was aimed at paying capital and debt expenses, without specifying the number of shares or the price for the issuance.
The share plunge came despite the carrier swinging to a profit of 37.1 million ringgit in the third quarter, reversing a loss of 477.6 million ringgit in the same quarter a year earlier. The struggling carrier posted a small operating profit of 4 million ringgit, ending six quarters of losses.
"The dilution on the company from the issue will be immense, there will be supreme volatility in the stock until there is more clarity on the exercise," an analyst from Maybank IB Research, who did not want to be identified, told Reuters.