Capital A seeks extra time

PETALING JAYA: Capital A Bhd, formerly known as AirAsia Group Bhd, is seeking an extension of time from Bursa Malaysia in submitting a regularisation plan that will see the merger of two airlines for the group to emerge from its current Practice Note 17 (PN17) status.

Originally, Capital A was given a deadline of Jan 7 2023 to reveal its finalised strategy to the regulator but is requesting an extension of the cut-off date to July 7 next year.

Commenting on the extension appeal, the group’s chief executive Tan Sri Tony Fernandes confirmed the transferring of Capital A’s aviation business, namely AirAsia Bhd and AirAsia Aviation Group Ltd, to sister company AirAsia X Bhd (AAX), of whom Fernandes himself recently stepped down as acting group chief executive after being in the post for nearly four months.

Fernandes emphasised in an interview with StarBiz that the merger scheme would not in any way dilute the holdings of shareholders’ in Capital A, as the exercise would be carried out with Capital A receiving shares in exchange for the disposal, which would be redistributed to its shareholders.

“We hope to obtain approval from Bursa for this plan by February 2023, and to complete it by July, with the consent of our shareholders and other relevant authorities.

“What it would mean is Capital A is in a way creating an aviation company, or streamlining its aviation operations under AAX.

“So our four airlines (AirAsia Malaysia, AirAsia Thailand, AirAsia Philippines and AirAsia Indonesia), will link up with the two in AAX (AAX Malaysia and AAX Thailand) to create an airline group,” he said, before adding that AAX would be aiming to add two more airlines in South-East Asia.

Fernandes pointed out that Capital A shareholders will still retain direct interest in the group’s aviation business via AAX following the restructuring, with Capital A being rebranded as an aviation services and digital group.

He noted, “Being in aviation services would mean Capital A would be involved in a host of activities such as engineering, ground handling, in-flight services, as well as in aviation consulting, which I believe has tremendous value.

“Aside from that, Capital A has digital ventures in the airasia Super App and AirAsia BigPay, as well as our logistic venture Teleport. We are looking to create more efficiencies between the Super App and BigPay.”

While the initial PN17 exit strategy is to inject AirAsia into AAX, which Fernandes is confident would lift the PN17 status off both Capital A and AAX, Capital X also has plans to list its aviation services, the two digital ventures, and Teleport separately in the future as an extension of the strategy, which would allow shareholders exposure to four public companies.

He said Capital A is aiming for a dual July 2023 listing of its aviation services group, with the New York Stock Exchange and Nasdaq among a number of stock exchanges that have made the group listing offers.

Meanwhile, having been granted an extension to submit its own proposed PN17 regularisation exit plan to Bursa Malaysia from January to April 28, 2023, AAX remains confident it could disclose its regularisation strategy to the regulator in January.

Its chief executive Benyamin Ismail, echoing the proposition to transfer AirAsia and AirAsia Aviation Group Ltd to AAX, said, “Following the acquisition, AirAsia, AirAsia Aviation Group, and AAX will form a consolidated aviation group, subject to the approval of our stakeholders and relevant regulatory authorities.

“While all airlines under the consortium will remain separate with regard to the operations, the acquisition of the short-haul airlines under one consolidated group will create synergies with AAX’s mid-range operations. “Leveraging the group’s wide network of over 130 destinations will provide us the opportunities to expedite our recovery after the completion of the regularisation plan.”

Benyamin is positive the strategy would improve the balance sheet and cash flows of AAX, while creating value for the company and shareholders over the longer term.

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