KUALA LUMPUR (Aug 1): Capital A Bhd (KL:CAPITALA) has submitted its extraordinary general meeting (EGM) circular to Bursa Malaysia for the proposed disposals of its entire equity interest in AirAsia Aviation Group Ltd (AAAGL) and AirAsia to AirAsia X Bhd (KL:AAX).

The group aims to complete the proposed disposals by December this year, heralding a new era for the new aviation group under AAX, as well as Capital A group’s aviation services and digital businesses.

“An EGM for shareholders to approve the proposed disposals will be convened in 21 days from the date of the issuance of the circular, at a later date,” it said in a statement on Thursday. 

The group said this pivotal move is a major step to bring Capital A closer to (finalisation of) its efforts to regularise its financial position, and is part of Capital A’s strategic plan to streamline its operations, as well as to concentrate on specialised areas supplementary to the aviation business.

“Financially, based on the pro forma effect of the proposed disposals, the shareholders fund of Capital A will turn to positive, from negative RM8.8 billion as of Dec 31, 2023, setting the first milestone to improve its financial position, bringing the company closer to exiting Practice Note 17 (PN17) status,” it said.

Capital A was listed under Bursa Malaysia’s PN17 category of financially distressed entities in January 2022.

Additionally, it said that Capital A has made substantial progress in equity and debt-raising efforts, which is expected to be announced in due course.

“The remaining business of Capital A will continue to contribute positive results to the group,” it added.

Capital A chief executive officer Tan Sri Tony Fernandes said the ongoing transformation will not only redefine the aviation landscape, but deliver unparalleled value to its shareholders, who will receive AAX shares upon completion of the proposals.

“This will ensure their (the shareholders) continued participation (in the aviation business), and [their continued] benefit from the aviation business’ potential prospects, while providing greater investment clarity between Capital A and AAX, allowing the capital market and investors to better see the potential and prospects of each entity,” he added.

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