Capital A-airasia sign conditional sale, purchase agreement

Malaysia’s Capital A Berhad (Capital A) and Airasia Group Sdn Bhd (Airasia Group), the newly incorporated entity that will eventually be the holding company of Airasia X Berhad (Airasia X), announced it has signed a conditional sale and purchase agreement for Capital A’s strategic divestment and Airasia Group’s strategic acquisition of its aviation businesses (the transaction).

This landmark agreement, approved by the boards of Capital A and Airasia X, is expected to catalyse Airasia to its next growth phase to become the world’s first low-cost network carrier and redefine the aviation industry landscape.

Under the terms of the agreement and subject to requisite approvals, the transaction includes two parts:

1. Indonesia, the Philippines and Cambodia will be fulfilled through the issuance of new Airasia Group shares to Capital A worth RM 3 billion. Following this divestment, Capital A will immediately distribute-in-specie RM 2.2 billion worth of the newly issued Airasia Group shares to Capital A shareholders. Upon the completion of the proposed divestment and Airasia X proposal, Capital A is expected to retain 18.39 percent of the enlarged issued shares of Airasia Group.

2. The divestment of Airasia Berhad, otherwise known as Airasia Malaysia, for RM 3.8 billion, to be satisfied by Airasia Group’s assumption of RM 3.8 billion of debt owed by Capital A to Airasia Berhad.

Shareholders from both sides stand to gain as the value of the aviation assets is realised. Prior to the transaction, Airasia X’s shares and listing status will be transferred to Airasia Group, effectively materialising the corporate structure of an enlarged aviation group, with Airasia X’s shareholders then holding shares in Airasia Group. The issuance of free warrants acts as a token of appreciation for shareholders’ continued support, while also providing them with the option to enhance their equity participation and contribute to the future growth trajectory of the enlarged

nd aviation business.

In recognition of the transaction’s magnitude, a private placement is also proposed to fortify Airasia Group’s financial standing, increase its shareholder base and improve the trading liquidity of its shares. From the perspective of Airasia X shareholders, the allure lies in gaining access to an unlocked value of RM 6.8 billion through a RM 3 billion new shares issuance. This investment grants them ownership in a mature and ongoing airline business operation, comprising four established airlines that collectively form Asean’s most extensive short-haul network, consolidating Airasia Group’s position as the largest low-cost carrier in Asean.

Capital A shareholders stand to benefit significantly as the proposed divestment is expected to unlock RM 6.8 billion in value of Capital A’s aviation business, more than double the current market capitalisation of the group. Following the divestment and the distribution-in-specie of RM 2.2 billion worth of new Airasia Group shares, Capital A shareholders will maintain direct ownership in the combined aviation businesses, ensuring access to future growth opportunities.

Moreover, post-divestment, Capital A will retain four high-growth, aviation-focused core businesses, including Capital A Aviation Services, Teleport, MOVE Digital and Capital A International, all poised for continued growth and diversification.