Others Malaysian airline system berhad ("mas" or "company") proposed selective capital reduction and

Type Announcement
Subject OTHERS
Description MALAYSIAN AIRLINE SYSTEM BERHAD ("MAS" OR "COMPANY")

PROPOSED SELECTIVE CAPITAL REDUCTION AND REPAYMENT EXERCISE PURSUANT TO SECTIONS 60 AND 64 OF THE COMPANIES ACT, 1965 ("ACT") ("PROPOSED SCR")

We refer to the announcement dated 8 August 2014 in relation to the Proposed SCR.

On behalf of the Board of Directors of MAS ("Board"), CIMB wishes to announce that on 29 August 2014, the Board received a letter from Khazanah Nasional Berhad ("Khazanah") in relation to a proposed restructuring of MAS ("Proposed Restructuring") and a proposed investment by Khazanah in MAS to facilitate the Proposed Restructuring ("Proposed Investment") ("Khazanah Letter").

The Proposed Investment is estimated to total up to RM6 billion (inclusive of funding required for the Proposed SCR). The disbursements of funds to MAS pursuant to the Proposed Investment, will be undertaken between 1 December 2014 and 31 December 2016 across three phases and are conditional on the implementation and completion of certain key initiatives by MAS. The detailed terms of the Proposed Investment are to be set out in an agreement to be entered into by Khazanah and MAS.

The Proposed Restructuring and the Proposed Investment are conditional on the successful completion of the Proposed SCR and the delisting of MAS from the Official List of the Main Market of Bursa Malaysia Securities Berhad.

Further, Khazanah had, on even date, issued a press release in relation to the Proposed Restructuring ("Khazanah Press Release").

For further details on the above, please find attached the following:

(i) Khazanah Letter;
(ii) Khazanah Press Release;
(iii) The summary report entitled "Rebuilding a National Icon: The MAS Recovery Plan" announced by Khazanah; and
(iv) a press release from the Board in response to the above.