KUALA LUMPUR: Capital A Bhd's unit, Asia Digital Engineering Sdn Bhd (ADE) has entered into a conditional term sheet with PT Garuda Maintenance Facility Aero Asia TBK (GMF) on the proposed investment for a landing gear maintenance, repair and overhaul (MRO).
ADE is Capital A's MRO unit, while GMF is Indonesia Garuda's MRO unit.
The proposed transaction is subject to due diligence to be conducted by ADE, finalised investment negotiations, and other conditions.
ADE proposes to take a 49 per cent interest in the entity running the landing gear MRO operations.
In a filing with Bursa Malaysia Securities, the company said the proposed transaction would enable ADE to support the AirAsia Group's maintenance requirements for its own aircraft fleet.
This is expected to also generate additional revenue whilst creating new business offerings through its joint investment with GMF.
"There is also a potential for future business expansion and new opportunities to cater third party customers from the APAC region," it said.
Capital A's share price dropped 1.27 per cent or one sen to 78 sen at midday today, bringing its market capitalisation to RM3.34 billion.