Capital A Restructures Aviation Operations, Set to Exit PN17 with RM3 Billion AAAGL Disposal

Bursa Malaysia has approved Capital A’s (CapA) restructuring plan, which involves disposing of its Indonesia, Thailand, Philippines, and Cambodia operations (AAAGL) for RM3 billion. The disposal will be settled through the issuance of 2.3 billion new shares in AirAsia X (AAX), to be renamed AirAsia Group (AAG). Additionally, CapA will dispose of its Malaysia aviation business (AAB) for RM3.8 billion, and distribute 1.7 billion AAX shares to CapA shareholders.

CapA will retain ownership of four major segments: Capital Aviation Services, Logistics, MOVE digital, and CAPI. The group plans to scale these segments and eventually monetize them through a listing. After restructuring, CapA’s equity is expected to recover, allowing it to exit PN17 status.

Capital A Restructures

Post-restructuring, AAX will consolidate all short, medium, and long-haul aviation operations under AAG. CapA will own an 18.5% stake in AAG, while shareholders of CapA will own 46.3% and private placement subscribers 24.6%. AAG will also grant share options to Garynma Investment for up to 12% of the enlarged share base.

The restructuring is expected to be completed by Q1 2025. HLIB remains positive about the restructuring, highlighting the streamlining of CapA’s aviation segments, long-haul and short-haul integration, and potential benefits for CapA shareholders from its exit from PN17. The bank reiterates a “BUY” recommendation with a target price of RM1.68.