KUALA LUMPUR (Jan 16): Capital A Bhd (KL:CAPITALA) said on Friday that it has completed the disposal of its aviation business to AirAsia X Bhd (KL:AAX) as part of its broader plan to exit Practice Note 17 (PN17) status.

Capital A's board said the disposal of AirAsia Aviation Group Ltd (AAAGL) was completed following the settlement of the disposal consideration through the allotment and issuance of 2.31 billion new AAX shares.

The consideration shares were issued to Capital A and its entitled shareholders on the same day, according to the group's filing with Bursa Malaysia.  

Capital A said it also completed the disposal of AirAsia Bhd (AAB) to AAX on Friday, with the consideration settled through a debt settlement arrangement. Under the agreement, AAX will now assume the RM3.8 billion of debt owed by Capital A to AAB, effectively discharging Capital A’s obligations to the airline unit.

The completion of the disposals follows Capital A’s earlier announcement on its broader plan to consolidate all its airline operations under AAX as part of its regularisation plan, allowing Capital A to pivot towards its non-aviation businesses while strengthening the capital structure of the airline group.

The aviation carve-out, first announced in 2024, is a central component of Capital A’s plan to regularise its financial position and exit PN17, while positioning AAX as the single listed entity housing the group’s short- and medium-haul airline operations.

"For shareholders’ information, AAX has also allotted and issued 606.06 million AAX placement shares under the AAX private placement [on Friday]. The AAX placement shares and the consideration shares [including the distribution shares] will be listed and quoted on the Main Market of Bursa Securities on Jan 19, 2026," the group added.

Capital A further announced that the reduction of its issued share capital by RM2.74 billion, arising from the distribution of AAX shares to its shareholders, took effect on Friday following the lodgement of the sealed High Court order with the Companies Commission of Malaysia.