Capital A chief executive officer Tan Sri Tony Fernandes.
KUALA LUMPUR: Capital A Bhd
will hold an extraordinary general meeting (EGM) on Oct 14, 2024 to seek shareholder approval for the proposed sale of its aviation business to AirAsia X Bhd (AAX).
This decision is part of Capital A’s strategy to streamline and promote long-term growth in both its aviation and non-aviation sectors.
"This marks a transformative, game-changing chapter for Capital A. The disposal of our aviation business to AAX will allow Capital A to focus on the four core pillars that will define the future of our Group: Aviation services, MOVE Digital, Teleport (Logistics), and the Brand AA company,” Capital A chief executive officer Tan Sri Tony Fernandes said in a statement.
“We believe this aligns with Capital A’s broader strategy to diversify its business portfolio and position itself as a technology-driven company. Our non-aviation businesses will emerge from the shadows and receive the recognition they deserve, while the aviation business will transform into a new AirAsia Group, with synergies between short-haul and long-haul operations enhancing efficiency, profitability, and returns for shareholders,” he added.
The pro forma financial statement as of Dec 31, 2023, included in the circular to shareholders dated Sept 20, indicates that the proposed disposal will improve Capital A's shareholders' equity from a negative RM8.8bil to a positive RM649mil.
“We look forward to gaining the support of our shareholders at the EGM and support from RCUIDS holders at the upcoming meeting as we embark on this transformative journey for Capital A’s next chapter of growth.”
Capital A said the meeting for the holders of redeemable convertible unsecured Islamic debt securities (RCUIDS) will be held on Oct 14.
Upon securing shareholders' approval at the EGM, the company will seek a court order to proceed with the proposed distribution of consideration shares to shareholders through a planned reduction and repayment of the company’s issued share capital.
These critical steps will enable Capital A to achieve a clean balance sheet and focus on soon submitting its regularisation plan, with the aim of exiting Practice Note 17 (PN17) status.
