SEPANG: Capital A Bhd is selling its aviation business to AirAsia X Bhd as part of its strategic move to streamline the group and raise capital.
Both companies entered into a non-binding letter of offer today.
Capital A chief executive officer (CEO) Tan Sri Tony Fernandes said the sale of the aviation business would see AirAsia X merging with AirAsia Bhd (AirAsia Malaysia) and AirAsia Aviation Group Ltd (AAGL).
AAGL consists of AirAsia subsidiaries in Thailand, Indonesia, the Philippines and Cambodia.
"All businesses across Capital A have been thriving and we're ready to grow. We need to raise funds for business expansion but gaining access has been challenging due to Capital A's Practice Note 17 (PN17) status."
"To ensure a robust financial injection, we're strategically pursuing the sale of the aviation business to AirAsia X to create an aviation pure play, consolidating both long and short-haul airlines under the AirAsia brand," Fernandes said at a media briefing here today.
Fernandes added that the sale and purchase agreement is expected to be signed within two weeks while the details of the proposed acquisitions including the sale amount will be announced in due course.
He said the move to separate the aviation business from Capital A will allow the company's non-aviation businesses to be recognised for their intrinsic value and potential.
Fernandes also said Capital A's companies, including Teleport (logistics), Capital A Aviation Services (maintenance, repair and overhaul, and in-flight) and MOVE digital (formerly airasia SuperApp) will also raise capital.
"Following the sale of the aviation business, Capital A shareholders will become shareholders of the two strong listed companies."
"We believe this move will bring greater clarity to investments, create a more focused shareholder base, and ultimately unlock value for our shareholders," Fernandes said.
He added that Capital A will be presenting a comprehensive PN17 regularisation plan by June 30 to Bursa Malaysia following the completion of the aviation business sale.