KUALA LUMPUR (Dec 8): Capital A Bhd (KL:CAPITALA) said on Monday it has obtained the High Court's approval for its proposed RM2.74 billion capital reduction, paving the way for the distribution of AirAsia X Bhd (KL:AAX) shares to the company’s entitled shareholders.
The approval is among the final milestones in Capital A’s restructuring, following its aviation consolidation agreements with AAX becoming unconditional in October and the announcement of the dividend-in-specie entitlement details, the company said in a statement.
With the latest court nod, Capital A said it will proceed with the distribution of AAX shares, seek a further High Court order to reduce its capital by RM5.51 billion under its regularisation plan, and subsequently apply for the upliftment of its Practice Note 17 (PN17) status.
The company said it remains on track to complete the disposal of its aviation and distribution businesses by December 2025, adding that all remaining steps under its regularisation plan are progressing smoothly.
On completion of its regularisation plan, all AirAsia airlines will be consolidated under a single airline platform, while Capital A will transition into an asset-light group focused on five high-growth businesses: Asia Digital Engineering (MRO), Teleport (logistics), AirAsia MOVE (travel platform), Santan (F&B) and AirAsia Next (brand and loyalty).
Capital A slipped into PN17 status in January 2022, then known as AirAsia Group Bhd, after its external auditors Ernst & Young PLT raised material concerns about the airline’s ability to continue as a going concern in its audited financial statements for the financial year ended Dec 31, 2019. At the time, shareholders’ equity fell below 50% of its share capital. Since then, the group has been working on a regularisation plan, which involves restructuring and divesting its airline business to AAX.
Shares of Capital A closed up 1.5 sen or 3.95% at 39.5 sen on Monday, giving it a market capitalisation of RM1.73 billion. Year to date, the counter has risen over 31%.