Low-cost airline company Capital A Bhd is expected to exit Practice Note (PN17) status by the first quarter of next year after submitting its proposed regularisation plan to Bursa Malaysia Securities Bhd.
Its chief executive officer Tan Sri Tony Fernandes said the group submitted the plan, which among others, includes a RM6 billion capital reduction, but would not affect flight frequency or reduce employee benefits.
“The regularisation plan is designed to strengthen our balance sheet by eliminating losses incurred during the COVID-19 pandemic and reflect the true of our underlying assets in Capital A.
“I’m hoping that by February or March (next year), we will have AirAsia Group as a new company and Capital A out of PN17. It is huge for me – really huge. It’s a simple plan, it’s just a capital reduction. So, I hope Bursa Malaysia will look at it favourably and approve it quite quickly,” he said.
Fernandes said the plan represents Capital A’s achievement in strengthening its financial position and reaffirms its commitment to driving long-term growth from here onwards.
“Not many companies successfully exit PN17 and those that do often take many years to achieve it. What makes this milestone even more remarkable is that we have reached it while navigating the unprecedented challenges brought about by COVID-19.
“Once the plan is approved, Capital A will follow AirAsia X’s success in exiting PN17 almost a year ago,” he added.
Fernandes also noted that besides Bursa Malaysia, shareholders and the High Court of Malaya have to approve the regularisation plan, which is subject to the completion of the disposal of aviation.
With all approvals in place, we are confident in executing our strategy to deliver sustainable growth and long-term value, building a stronger and more resilient Capital A,” he continued.
Fernandes also said that Capital A remains committed to regulatory compliance and will focus on mitigating risks, including market competition and operational disruptions.
“The group is confident of its strategic direction and its ability to execute the regularisation plan effectively, setting the stage for a stronger and a more resilient future,” he added.
Earlier in May, the company announced its plan to sell its aviation business to sister company AirAsia X Bhd (AAX) for RM6.8 billion through a share and novation of debt deal.
From this, shareholders was expected to see the distribution of RM3 billion worth of new shares in a new listco called AirAsia Group Bhd (AAG) at RM1.30 apiece and the transfer of RM3.8 billion debt from Capital A to AAG. AAX will then transfer its listing status to AAG.
The exercise was meant to help offset Capital A’s negative shareholder equity of RM10.47 billion (as of December 2023) and lift the low-cost carrier from the PN17 status.
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