Capital A To Merge AirAsia With AirAsia X
Capital A, formerly known as AirAsia Group, plans to combine its aviation businesses with long-haul low-cost carrier AirAsia X as part of its restructuring.
Explaining the plan, chief executive Tony Fernandes states: "The plan envisaged will entail the disposal of Capital A's aviation businesses, namely AirAsia and AirAsia Aviation Group, to AirAsia X. The shares consideration, received in exchange for the disposal, will then be distributed to Capital A shareholders, so that they will retain a direct interest in the aviation businesses via AirAsia X, following the restructuring."
He adds: "In essence, via this scheme, Capital A's shareholders' value will be preserved. Capital A will be rebranded as an aviation services and digital group, post the disposal and distribution exercises. We envision a separate spin-off listing in the future for the aviation services businesses of Capital A once the PN17 status is resolved."
PN17 status refers to a classification of the Malaysian stock exchange Bursa Malaysia for companies in financial distress which can face delisting if they fail to improve things within a certain timeframe. At the start of this year, Capital A said it was working on a plan to regularise its finances.
The group is engaging RHB Investment Bank, BDO Consulting, Deloitte Corporate Advisory Services, Ernst & Young, Adnan Sundra & Low and Providence Strategic Partners to advise on its regularisation plan, for which it is seeking an extension of time from Bursa Malaysia Securities.
It expects to announce the finalised regularisation plan to Bursa Malaysia Securities in January and followed by submission for approval targeted in February.
Capital A expects to complete the implementation of the regularisation plan by July, subject to necessary approvals including from its board of directors, shareholders and RCUIDS holders, Bursa Malaysia Securities and other relevant authorities, it adds.
Fernandes says: “We are grateful for the tremendous support and understanding so far from our lessors, partners, customers, staff and other stakeholders, who enabled us to survive this far and turn this crisis into an opportunity.
"Together with our partners, financial and legal advisors, we are finalising a scheme, subject to regulatory and other necessary approvals, that we anticipate will not only uplift us from the PN17 status, but also unlock enormous value for the shareholders of Capital A, and ultimately, lead us to a healthier financial standing and profitability.”