KUALA LUMPUR: Capital A Bhd has submitted its extraordinary general meeting (EGM) circular to Bursa Malaysia that details the proposed disposals of its aviation business to AirAsia X (AAX).
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.
On April 25, Capital A entered into conditional share agreements with AirAsia Group Sdn Bhd (AAG) to dispose AirAsia Aviation Group Ltd (AAAGL) and AirAsia Bhd (AAB) for RM6.8 billion.
AAAGL is AirAsia's subsidiaries in Thailand, Indonesia, the Philippines and Cambodia.
In a statement today, Capital A said this pivotal move is a major step in the effort to regularise its financial position and is part of its strategic plan to streamline its operations and concentrate on specialised areas supplementary to the aviation business.
The Practice Note 17 (PN17) company said it aims to complete the disposal by December, heralding a new era for the new aviation group under AAX as well Capital A's aviation services and digital businesses.
"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," said Capital A chief executive officer (CEO) Tan Sri Tony Fernandes.
He noted that the initiative will redefine the aviation landscape and also 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," he added.
AirAsia Aviation Group CEO Bo Lingam said the company's strong ancillary revenue model and strategic financial initiatives have positioned it to emerge stronger than ever as it looks forward to fully reactivating all aircraft by end of this year and awaits an exciting 2025.
He said the 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," he said.
Based on the proforma effect of the proposed disposals, Capital A said the shareholders fund will turn to positive from a negative of RM8.8 billion as of Dec 31, 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 while its remaining business will continue to contribute positive results.