Malaysia Airlines has announced the suspension of its shares as state investment fund plans a "complete overhaul" of its operation after two separate plane disasters this year.

Khazanah Nasional said in a statement today that a payment of 27 sen for each share in the company that it does not own has been proposed. This amounts to a total of 1.38 billion ringgit (US$429 million).

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Sources have said that the suspension of shares is connected with the plans of the state investment fund to privatized Malaysian Airlines Systems (MAS), which will stand as the first step to the carrier's major restructuring process.

Malaysia Airlines has lost two airplanes this year, which spurred a slump in bookings that affected its already struggling business operations amid strong competition from other Asian airlines.

On March 8, Flight 370 vanished with 239 people on board who were flying from Kuala Lumpur to Beijing. The plane has not been found yet. Search operations in the southern Indian Ocean are still on-going.

Four months later, another plane accident happened as a missile took down Flight 17 and killed 298 people. The plane was travelling from Amsterdam to Kuala Lumpur when it was shot down over Ukraine.

Even before the major disasters, Malaysia Airlines had increased losses to 4.13 billion ringgit over the previous three years. Its shares had also fallen to 23 percent this year.

MAS will need "substantial funding requirements" for the next few days to maintain operations, Khazanah said.

Privatizing the carrier first will make the restructuring easier due to the lack of regulatory requirements, said Jason Chong, chief investment officer of Manulife Asset Management Services in Kuala Lumpur.

Nothing less will be required to revive the national carrier to earn profit as a commercial entity and to function as a critical national development entity.

The state fund also said it will give more details regarding the overhaul by the end of August following the the approval of shareholders.

TagsMalaysia airlines restructure