LONDON, Dec 19 ― Pharmaceutical giants GlaxoSmithKline and Pfizer today announced a merger of their consumer healthcare units that produce over-the-counter medicines. GSK said it would have a 68-per cent controlling equity interest in the joint…
PETALING JAYA: Unjustified price increases such as the hike in passenger service charge (PSC) could result in airlines being squeezed out of business and subsequently affect tourism arrivals, said low-cost carrier AirAsia.
In a strongly worded statement titled “MAHB’s record profits come at a cost to the Malaysian economy and tourism industry”, the airline said the PSC hike imposed by airport operator Malaysia Airports Holdings Bhd (MAHB) will lead to unintended consequences when MAHB’s clients, who have no choice but to use its services, are eventually squeezed out of business.
“Then, everything will collapse – Malaysia’s tourism arrivals, billion in tourism receipts and revenues to MAHB’s own coffers (a fact it has failed to acknowledge). MAHB rewards itself with excessive monopoly profits, yet it provides the Malaysian public with embarrassingly low service levels,” it said.
The two parties have been in a row over the additional PSC imposed by MAHB of RM23 per passenger at klia2, in a move to equalise the PSC rate at klia2 and Kuala Lumpur International Airport (KLIA).
Last week, MAHB slapped AirAsia Group Bhd and AirAsia X Bhd (AAX) with a RM36.1 million lawsuit for refusing to collect the additional PSC and alleged arrears in PSC.
AirAsia X Malaysia CEO Benyamin Ismail said more than 90% of the “millions” of passengers departing from klia2 who fly with AirAsia will attest to the long walks to the departure gates, labeling klia2 as a passenger-unfriendly airport with inferior facilities and unjustified high charges.
He reiterated AirAsia’s complaints about the airport such as flight disruptions and cancellations due to major apron and runway defects, unscheduled closure of runways, ponding of water and fuel pipeline ruptures.
“We were sued after we refused to collect the extra RM23 that MAHB has imposed for the sole benefit of its shareholders. We will vigorously fight this suit. We will not be part of this scheme to burden the traveling public by making them pay more for below par services,” he said.
AirAsia noted that MAHB’s net profit more than tripled in 2017 to RM237 million from RM73 million in 2016, and estimates that MAHB’s returns on capital are well in excess of the level of the cost of capital set by regulators.
AirAsia Malaysia CEO Riad Asmat urged regulators and policy makers to rebuff the “unfair and unreasonable” attempt by MAHB to use its monopoly to enrich itself further by revisiting and rescinding the decision to raise the PSC.
“The overall tourism sector, one of Malaysia’s biggest revenue earners, and the interests of millions of Malaysians who have been able to fly because of the low fares pioneered by AirAsia, are being threatened by MAHB’s price hikes,” he said.
He challenged MAHB’s argument of needing more profits to operate smaller loss-making airports on behalf of the government, noting MAHB’s “exponential” growth in profits over the last three years even after taking into account losses in its Turkish operations.
“The additional RM23 to be collected will amount to more than RM100 million a year that will go straight to MAHB’s bottom line rather than to the government. MAHB will continue to be among the most profitable Malaysian companies for many years to come. But this will come at a cost to the wider Malaysian economy and at the expense of engines of growth such as AirAsia and AirAsia X,” he said.
TOKYO, Dec 19 — SoftBank Corp shares slumped more than 12 per cent on debut, as investor appetite for Japan’s biggest ever IPO was hurt by a recent service outage at the telecoms operator and worries over its exposure to Chinese telecoms gear…
KUALA LUMPUR: Unit 1 of Jimah East Power Sdn Bhd’s coal-fired power plant in Port Dickson, Negeri Sembilan, successfully achieved its first synchronisation on Dec 10. Jimah East Power is a 70 per cent subsidiary of Tenaga Nasional Bhd (TNB). TNB said the first synchronisation means the generator of Unit 1 had been synchronised to […]
PETALING JAYA: CIMB Group Holdings Bhd is expected to record a gain of disposal of approximately RM200 million from the process of transferring the group’s stockbroking business to its joint venture company with China Galaxy Securities Co Ltd.
This comes after taking into account the premium on the disposal of approximately RM433 million and goodwill attributable to the business.
CIMB said the consideration in connection with the proposed business transfer will be satisfied in cash and it was determined based on the future prospects and net asset value of the in-scope business as at Dec 31, 2015, which amounted to RM565.6 million.
The consideration is subject to closing audit adjustments, if any.
Jupiter Securities, the subsidiary of China Galaxy Securities Co Ltd (CGS)-CIMB Holdings Sdn Bhd, which is the Malaysian joint venture entity, will operate the stockbroking business.
CIMB said in a stock exchange filing that its wholly owned subsidiary CIMB Group Sdn Bhd (CIMBG), China Galaxy’s wholly owned unit China Galaxy International Financial Holdings Ltd (CGI), and CGS-CIMB Holdings Sdn Bhd has inked a share subscription agreement for the subscription of new shares in CGS-CIMB Holdings Sdn Bhd.
The proposed business transfer entails the sale of CIMB Investment Bank Bhd’s cash equities business and 100% equity interest in CIMB Futures Sdn Bhd as well as CIMB Bank Bhd’s equity financing services business and share margin financing granted in connection with the cash equities to Jupiter Securities.
After the completion of the exercise, CIMBG and CGI will hold 50% stake each in the Malaysian JV entity.
The exercises are expected to be completed in the first half of 2019.
KUALA LUMPUR, Dec 18 — MIDF Research expects Malaysia’s gross domestic product (GDP) growth to slightly improve to 4.9 per cent in 2019 from 4.8 per cent projected for 2018, mainly driven by healthy domestic spending fuelled by the service…
SAN FRANCISCO, Dec 18 — The proposed US$26-billion (RM108.5 billion) merger between wireless operators T-Mobile and Sprint in the US won approval yesterday from regulators that vet such deals for national security concerns. T-Mobile said the deal…
PETALING JAYA: PLUS Malaysia Bhd today confirmed that it has been served with an arbitration notice by CIMB Group Holdings Bhd, but it refuted allegations of its Radio Frequency Identification (RFID) system breaching the joint venture agreement (JVA).
PLUS said in a statement that the recent launch of the PLUS RFID public pilot project will promote choices to the rakyat as it offers options and convenience for customers to pay as you use, with credit and debit cards, in addition to the existing e-wallet and prepaid mode of payment provided by Touch ‘n Go.
“Touch ‘n Go’s e-wallet and prepaid payment remains one of the options in the PLUS RFID public pilot project, PLUS therefore believes that it is not a breach of any agreement.”
PLUS opined that giving additional choices to the highway users should be considered a virtue, in line with the spirit of the Touch ‘n Go agreement to provide them the best customers service.
“PLUS is looking forward to making our case in the arbitration proceeding.”
Yesterday, CIMB and its wholly owned subsidiary CIMB SI 1 Sdn Bhd announced that they have filed arbitration proceedings against PLUS for alleged breach of obligations under their JVA signed 20 years agoin relation to Touch ‘n Go Sdn Bhd.
CIMB and CIMB SI 1 are seeking an injunction to restrain PLUS from engaging in further business of the PLUS RFID system together with damages, interests and costs.