KUALA LUMPUR (Oct 17): Capital A Bhd (KL:CAPITALA) and AirAsia X Bhd (KL:AAX) have agreed to waive the need for an exemption from the Thai Securities and Exchange Commission (Takeover Panel), paving the way for the completion of a massive corporate exercise that will see all AirAsia-branded airlines consolidated under AAX.

In a filing with Bursa Malaysia, AAX said the two parties have agreed to a third supplemental agreement to waive the need for the regulatory approval to exempt them from buying out all minority shareholders of Asia Aviation Public Company Ltd (AAV), which owns Thai AirAsia.

Instead of seeking the exemption, AAX, together with a local Thai partner, will proceed to buy out the minority shareholders of AAV.

Under the arrangement, the Thai partner will pay for the entire tender offer, while AAX’s 40.71% stake in AAV will remain unchanged. There will be no financial impact on AAX. Thai AirAsia’s operations will also continue as usual, with no effect on flights or staff, according to AAX.

This resolution enables the consolidation plan to advance without being stalled by the Thai regulatory process.

With the Thai regulatory condition now waived, both parties expect to declare that all conditions precedent have been fulfilled and that the share sale and purchase agreement will become unconditional by the end of October, according to a statement from Capital A.

The transaction is targeted for completion in December. The remaining steps required for completion include capital reduction and distribution, allotment of shares, and listing of shares. 

Capital A’s plan to sell its airline business to AAX was first announced in April 2024 as part of efforts to streamline its operations and resolve its Practice Note 17 (PN17) status, which arose from financial distress caused largely by the Covid-19 pandemic’s impact on its airline operations.

“This latest development paves the way for Capital A to apply for uplift from PN17 status by the end of December, which will enable Capital A to fully focus on scaling its high-growth businesses under its group, namely ADE (engineering), Teleport (logistics), AirAsia Move (travel platform), Abc. (brand licensing and digital IP) as well as Santan (F&B business) and BigPay (fintech venture),” it added.

At Friday’s closing bell, Capital A’s share price rose 2.5 sen or 2.82% to 91 sen, giving it a market capitalisation of RM3.93 billion. AAX fell two sen or 1.19% to RM1.66, valuing the group at RM742.14 million.