KUALA LUMPUR, Sept 23 — Capital A Bhd will hold an extraordinary general meeting (EGM) on Oct 14, 2024, where the proposed disposal of its aviation business to sister company AirAsia X Bhd (AAX) will be tabled for shareholders’ approval.

The operator of low-cost carrier AirAsia said this key step comes as part of its strategic move to streamline and drive long-term growth across its aviation and non-aviation businesses.

Chief executive officer Tan Sri Tony Fernandes said the pro forma effects of the proposed disposal based on the financial statement as of Dec 31, 2023, as included in the circular to shareholders dated Sept 20, 2024, shows that Capital A shareholders’ equity will turn to positive of RM649 million from a negative of RM8.8 billion.

"We look forward to gaining the support of our shareholders at the EGM and support from the Redeemable Convertible Unsecured Islamic Debt Securities (RCUIDS) holders at the upcoming meeting as we embark on this transformative journey for Capital A’s next chapter of growth,” he said in a statement today.

According to the statement, the meeting for the RCUIDS holders will be held on Oct 1, 2024.

Capital A said 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 upon securing shareholders’ approval at the EGM.

These critical steps will enable Capital A to achieve a clean balance sheet and focus on submitting its regularisation plan soon, with the aim of exiting Practice Note 17 (PN17) status, it added.

Meanwhile, Fernandes said the company believes that the exercise 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 said.

Fernandes emphasised that the move 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, namely our aviation services, Move Digital, Teleport (Logistics), and the Brand AA company,” he added. — Bernama