KUALA LUMPUR (APRIL 26): Shares of AirAsia X Bhd (AAX) rose to a six-month high as investors cheered a restructuring plan that would make the company the largest low-cost carrier in Southeast Asia.
AAX surged as much as 16% before ending the day with a13% gain, its steepest climb in a single day since Oct 25, 2023. The stock closed at RM1.37 with 18.99 million shares traded, valuing the company at RM612.49 million.
Analysts are generally positive on the restructuring that would lift Capital A Bhd out of PN17, a status reserved for financially-troubled companies, while benefitting shareholders of AAX, which currently only operates medium- to long-haul flights.
Capital A's restructuring plan involves the proposed disposal of AirAsia Bhd (AAB), which owns the Malaysian aviation operation, and AirAsia Aviation Group Ltd, which manages the Indonesian, Thai, Philippine and Cambodian operations, for RM6.8 billion to AAX.
AAX will be delisted and a new company named AirAsia Group Sdn Bhd (AAG) will then assume the listing previously held by AAX after a share swap.
"We are overall positive on the exercise,” said Hong Leong Investment Bank, as the Capital A’s aviation segment would be consolidated under AAG and strengthen “the business model for long haul-short haul integration, with a new medium-haul segment as the intermediary”.
AAX’s enlarged entity in the form of AAG, Hong Leong IB continued, “will be in a much stronger position to compete effectively against the established full service carriers” such as Singapore Airlines, Emirates, and Japan Airlines.
The proposed corporate exercises are anticipated to be completed by the third quarter of 2024, with the regularisation plan expected to be finalised by the first quarter of 2025. Capital A will still own an 18.39% stake in AAG.
At the closing bell, Capital A was up 3.5 sen or 5% at 73.5 sen.