Capital A Berhad (formerly known as AirAsia Group Berhad) (“Capital A” or “Group”) has announced that it is seeking an extension of time from Bursa Malaysia Securities Berhad to submit a holistic regularisation plan to remedy its Practice Note 17 (“PN17”) status. The Group expects to announce the finalised regularisation plan to Bursa Malaysia Securities in January 2023 and followed by submission for approval targeted in February 2023.
This follows Capital A’s recent announcement that it is engaging RHB Investment Bank Bhd, BDO Consulting Sdn Bhd, Deloitte Corporate Advisory Services Sdn Bhd, Ernst & Young PLT, Adnan Sundra & Low, and Providence Strategic Partners to advise on its regularisation plan.
Chief Executive Officer of Capital A Tony Fernandes said, “We were at the sharp end of Covid, as were many airlines around the world, but we are coming out of it stronger than before – our airlines and network are fast returning to pre-pandemic levels, and our digital businesses are performing better than many had expected. While our PN17 status remains an accounting issue and does not accurately reflect the business viability and prospects of Capital A, we have nevertheless worked very hard to develop a plan to address the PN17 status as a key part of our post-pandemic recovery journey.”
He added, “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.”
He explained, “The scheme will not involve shareholders’ value dilution. In essence, the scheme will result in a clear separation between Capital A’s three main portfolios of businesses, namely the aviation group, the digital businesses and the logistics plus aviation services.
“The plan envisaged will entail the disposal of Capital A’s aviation businesses, namely AirAsia Berhad and AirAsia Aviation Group Limited, to AirAsia X Berhad (AAX). The shares consideration, received in exchange for the disposal, will then be distributed to Capital A shareholders, so that they will retain direct interest in the aviation businesses via AAX, following the restructuring. 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.”
Capital A expects to complete the implementation of the regularisation plan by July 2023, subject to necessary approvals including from our board of directors, shareholders and RCUIDS holders, Bursa Malaysia Securities and other relevant authorities.