By Julie Makinen, Los Angeles Times

BEIJING — Saying Malaysia Airlines needs a “complete overhaul” following two devastating air disasters, the Malaysian government’s strategic investment fund on Friday proposed buying out the approximately 30 percent of the carrier’s shares it does not own and delisting it as a publicly traded company.

“The proposed restructuring will critically require all parties to work closely together to undertake what will be a complete overhaul of the national carrier on all relevant aspects of … the airline’s operations, business model, finances, human capital, and regulatory environment,” the fund, Khazanah Nasional Berhad, said in a statement.

“Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity.”

Khazanah said it was offering more than $400 million for the stock it does not hold, paying shareholders a 12.5 percent premium over Thursday’s closing price.

Trading of the airline’s shares was suspended Friday in Kuala Lumpur, but no immediate changes to the airline’s operations were announced. The airline has about 360 flights per day to 60 destinations, with a capacity for about 50,000 passengers.

Even before the disappearance of Flight 370 in March and the downing of Flight 17 over strife-torn Ukraine last month, the carrier had been losing money, and the twin losses severely exacerbated its financial problems and its stock has plunged.

Khazanah’s managers said the proposed delisting of Malaysia Airlines shares represented “the first stage” of the restructuring program and that the fund was in the final stages of completing the overall restructuring proposal. More detailed plans are expected to be released at the end of August, pending approvals from government regulators and the Ministry of Finance.

Flight 370 vanished en route from Kuala Lumpur to Beijing with 239 people aboard, and five months later, no wreckage from the Boeing 777 has yet been found.

Vessels from Australia, Malaysia, and China are continuing to survey a swath of the southern Indian Ocean floor in preparation for a deep-sea search, which is expected to begin in September.

Meanwhile, efforts to recover evidence and remains from the Flight 17 crash site in eastern Ukraine remain incomplete as fighting in the area between pro-Russian separatists and Ukrainian forces is continuing.

All 298 people aboard the Boeing 777 died when the aircraft bound from Amsterdam to Kuala Lumpur went down on July 17; so far, about 228 coffins have been returned to the Netherlands. The majority of those on board were Dutch.

Dutch Prime Minister Mark Rutte this week said the search was being suspended as conditions in the area had become too dangerous.

AFP Photo/Manan Vatsyayana

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