KUALA LUMPUR (March 21): Capital A Bhd (KL:CAPITALA) said the High Court has confirmed its issued share capital reduction and repayment, paving the way for the low-cost airline’s proposed distribution.

“The confirmation from the High Court provides us with the clarity we need to move ahead with the proposed distribution and other key initiatives,” Capital A chief executive officer Tan Sri Tony Fernandes said in a statement on Friday.

“We are fully committed to ensuring a seamless transition for all stakeholders as we continue to reshape Capital A into a leaner, more focused travel and digital business,” he said.

Capital A said the exact amount of share capital reduction required for the proposed distribution will be determined based on its sister company AirAsia X Bhd’s (KL:AAX) share price at the time of application to the court.

The group’s capital reduction and distribution exercise is pursuant to the proposed distribution of shares in a new company, AirAsia Group Bhd (AAGB), which will be taking over AirAsia X's listing status.

Capital A has proposed to inject its AirAsia aviation businesses into AAGB in exchange for RM3 billion worth of AAGB shares, part of which will be distributed to Capital A’s shareholders, and RM3.8 billion in debt novation.

Under the group’s restructuring exercise, AirAsia X — soon to become AAGB — plans to raise RM1 billion via a placement of shares.

Shares of Capital A closed down 1.5 sen or 1.85% to79.5 sen on Friday, giving the group a market capitalisation of RM3.44 billion.

AirAsia X closed down three sen or 1.88% to RM1.57, valuing the company  at RM701.90 million.