KUALA LUMPUR (Jan 14): Shares of Capital A Bhd (KL:CAPITALA) jumped as much as 25% on Wednesday (Jan 14) as investors cheered the company’s progress towards exiting Practice Note 17 (PN17) status.

The stock opened at 45 sen and rallied 11 sen to 55 sen before closing the day at 54.5 sen, still up 10.5 sen or 23.9%. With over 135 million shares traded, Capital A was the most active stock on Bursa Malaysia.

At its closing price, Capital A's market capitalisation stood at RM2.42 billion. The stock has risen more than 13% since the start of the year.

Capital A confirmed on Tuesday that the distribution of AirAsia X Bhd (KL:AAX) shares to its shareholders will take place on Friday (Jan 16). The distribution follows AirAsia X’s RM1 billion private placement, which was fully subscribed by a mix of institutional and private investors.

The share distribution and private placement are key elements of Capital A’s regularisation plan to exit PN17 status. Under the plan, AirAsia X will acquire Capital A’s aviation businesses — AirAsia Aviation Group Ltd and AirAsia Bhd — for RM6.8 billion, consolidating all short- and medium-haul AirAsia carriers under a single listed entity. The RM1 billion private placement is intended to fund the enlarged airline’s operations.

Following the share distribution, Capital A said it intends to submit its application to Bursa Malaysia for PN17 upliftment on Jan 19.

According to Bloomberg, Capital A currently has four 'buy' calls, three 'hold' calls and one 'sell' call, with a 12-month consensus target price of 40 sen.