KUALA LUMPUR: Capital A Bhd is seeking an extension from Bursa Malaysia to submit its regularisation plan to remedy its Practice Note 17 (PN17) status.
Capital A expects to announce the finalised regularisation plan to Bursa Malaysia in January 2023, followed by a submission for targeted approval in February 2023.
This follows Capital A's recent announcement that it is engaging RHB Investment Bank Bhd, BDO Consulting Sdn Bhd, Deloitte Corporate Advisory Services Sdn Bhd, Ernst & Young PLT, Adnan Sundra & Low, and Providence Strategic Partners to advise on its regularisation plan.
Chief executive officer Tony Fernandes said Capital A's PN17 status remains an accounting issue, and this does not accurately reflect the business viability and prospects of the company.
"We have worked very hard to develop a plan to address the PN17 status as a key part of our post-pandemic recovery journey.
"Together with our partners, financial and legal advisors, we are finalising a scheme, subject to regulatory and other necessary approvals.
"We anticipate this scheme to not only uplift us from the PN17 status but also unlock enormous value for the shareholders of Capital A and, ultimately, lead us to a healthier financial standing and profitability," he said.
Meanwhile, Fernandes said the scheme would not involve shareholders' value dilution.
In essence, he said the scheme would result in a clear separation between Capital A's three main portfolios of businesses, namely the aviation group, the digital businesses and the logistics plus aviation services.
"The plan envisaged will entail the disposal of Capital A's aviation businesses, namely AirAsia Bhd and AirAsia Aviation Group Ltd, to AirAsia X Bhd (AAX).
"The shares consideration, received in exchange for the disposal, will then be distributed to Capital A shareholders so that they will retain a direct interest in the aviation businesses via AAX following the restructuring," he said.
Fernandes said that this scheme would preserve Capital A's shareholders' value.
He said Capital A would be rebranded as an aviation services and digital group, post the disposal and distribution exercises.
"We envision a separate spin-off listing in the future for the aviation services businesses of Capital A once the PN17 status is resolved," he said.
Capital A expects to implement the regularisation plan by July 2023.
This is subject to necessary approvals from our board of directors, shareholders and RCUIDS holders, Bursa Malaysia Securities and other relevant authorities.