KUALA LUMPUR, 1 August, 2024 - Capital A Berhad (Capital A) has submitted its Extraordinary General Meeting (EGM) circular to Bursa Malaysia, that details the proposed disposals of its entire equity interest in AirAsia Aviation Group Limited (AAAGL) and AirAsia Berhad (AAB) to AirAsia X (AAX) (Proposed Disposals). An EGM for shareholders to approve the Proposed Disposals will be convened in 21 days from the date of the issuance of the circular at a later date. 

This pivotal move is a major step to bring Capital A closer in its effort to regularise its financial position and is part of Capital A’s strategic plan to streamline its operations and concentrate on specialised areas supplementary to the aviation business.

Capital A aims to complete the Proposed Disposals by December, heralding a new era for the new aviation group under AAX as well Capital A Group’s aviation services and digital businesses.

Capital A CEO Tony Fernandes said, “It took four years of painstaking efforts to get us here, and we couldn’t be more excited. The ongoing transformation of the new aviation group is a testament to Capital A's resilience and strategic foresight. It will not only redefine the aviation landscape but deliver unparalleled value to its shareholders, who will receive AAX shares upon the completion of the proposals. This will ensure their continued participation and benefit from the aviation business's potential prospects, while providing greater investment clarity between Capital A and AAX, allowing the capital market and investors to better see the potential and prospects of each entity.”

Bo Lingam, CEO of AirAsia Aviation Group said, “We are on the cusp of a new chapter for our Aviation Group. Our strong ancillary revenue model and strategic financial initiatives have positioned us to emerge stronger than ever as we look forward to fully reactivating all our aircraft by end of this year and await an exciting 2025. This remarkable turnaround will be supported by a valuable order book and a versatile fleet of Airbus A321LR (long range) and A321XLR (extra long range) aircraft. By 2025, our goal is to surpass pre-Covid performance levels and continue our path of growth and innovation. We expect our fleet to grow from the current 221 to over 300 aircraft in the next five years, carrying more than 100 million guests annually.”

Financially, based on the pro forma effect of the proposed disposals, the shareholders fund of Capital A will turn to positive from a negative of RM8.8 billion as of 31 December 2023, setting the first milestone to improve its financial position, bringing the company closer to exiting from PN17. Additionally, Capital A has made substantial progress in equity and debt-raising efforts, which is expected to be announced in due course. The remaining business of Capital A will continue to contribute positive results to the Group.

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