KUALA LUMPUR (Oct 29): Capital A Bhd (KL:CAPITALA) said all conditions for its aviation restructuring have been met or waived, allowing all AirAsia-branded airlines to be consolidated under AirAsia X Bhd (KL:AAX). This move is key for Capital A to exit Practice Note 17 (PN17) status.
In a filing with Bursa Malaysia, the group said the share sale and purchase agreements (SSPAs) for the proposed disposals have become unconditional as of Wednesday (Oct 29).
“The board will determine and announce the entitlement date for the proposed distribution in due course,” Capital A said.
This milestone clears the final hurdle in a complex transaction that has been delayed several times as the parties sought approvals from regulators and financiers in multiple jurisdictions.
The cut-off date for completion had been extended at least six times — from the original Jan 25, 2025 deadline to March 25, then to May 31, July 31, Aug 31, Sept 30 and most recently to Oct 31 — to allow additional time for the requisite consent.
This follows AAX and its Thai partner agreeing to buy out minority shareholders of Asia Aviation PCL (AAV), the operator of Thai AirAsia, rather than seeking a waiver.
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.
Capital A first unveiled plans in April 2024 for AAX to acquire AirAsia Aviation Group Ltd (AAAGL) and AirAsia Bhd (AAB) for RM3 billion and RM3.8 billion respectively, as part of a restructuring aimed at consolidating all short- and medium-haul AirAsia carriers under a single listed entity.
The deal also includes AAX raising RM1 billion via a private placement to fund the enlarged airline operations.
Capital A was classified as a PN17 company in January 2022 after the Covid-19 pandemic severely hit air travel.
By recording a gain on disposal from the sale of its aviation units, Capital A expects to reverse its negative equity position and restore its financial standing, allowing it to focus on its non-aviation businesses.
These include its digital and services ventures such as Asia Digital Engineering (ADE), Teleport (logistics), AirAsia Move (travel platform), Abc. (brand licensing and digital IP), Santan (F&B) and BigPay (fintech).
The transaction is targeted for completion by December, subject to procedural steps including capital reduction, distribution and listing of shares.
At Wednesday’s close, Capital A shares rose 2.5 sen or 2.56% to RM1, giving it a market capitalisation of RM4.35 billion. AAX also went up by two sen or 1.12% to close at RM1.81, valuing it at RM809.2 million.
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