Capital A Berhad has announced a new plan to reduce its issued share capital by RM6 billion.
This initiative is part of a comprehensive regularization strategy to address its financial challenges and exit from Practice Note 17 (PN17) status.
It aims to offset accumulated losses, expected to improve the company's credibility among stakeholders, including banks and investors.
The amount of capital reduction depends on the group's accumulated losses, with the aim of rationalizing the balance sheet to better reflect the value of its underlying assets.
The restructuring is planned to allow Capital A to stop consolidating the net liabilities of its subsidiaries, AirAsia Aviation Group Ltd and AirAsia Bhd, putting the company in a stronger financial position.
CEO Tan Sri Tony Fernandes emphasized his company's shift in focus to sustainable growth, with plans to prioritize its four core companies: Capital A Aviation Services, Teleport, MOVE Digital, and Brand AA Sdn Bhd.
This strategic shift aims to transform Capital A from a leading low-cost airline into a diversified sector, which meets evolving consumer needs and technological advancements.
In addition to reducing capital, Capital A has decided to cancel its US$1.15 billion special purpose acquisition company (SPAC) agreement with Aetherium Acquisition Corp.
Fernandes stated that this decision is in line with the group's commitment to their regularization plan.
Looking ahead, Capital A is in the process of positioning itself for expansion across its verticals.
As of September 30, 2024, Capital A has successfully re-operated 200 aircraft, demonstrating a strong recovery trajectory as the aviation and tourism sectors recover from the pandemic.
The final regularization plan is scheduled to be delivered on November 31, 2024, marking an important moment for the company in its efforts to achieve recovery and growth.
