After more than a year of trying to restructure and stabilize its financial position, Capital A Berhad has submitted its long-awaited regularisation plan to Bursa Malaysia.
This step marks the company’s bid to exit the Practice Note 17 (PN17) status — a designation for financially distressed companies.
Talking to reporters at a brief press conference at Kuala Lumpur International Airport, CEO Tony Fernandes expressed confidence that Capital A would exit PN17 by February or March (next year), and by the first quarter of 2025, AirAsia Group would also register as a new company.
The proposed PN17 plan is subject to the completion of the disposal of aviation to AirAsia X. AirAsia X is expected to complete the acquisition of Capital A’ aviation business for MYR 6.8 billion ($1.5 billion).
Capital A’s regularisation plan focuses on capital reduction of up to RM6 billion ($1.3 billion), aimed at eliminating losses from Covid-19. “This is huge. Not that many companies successfully exit PN17, and those that do often take many years to achieve it,” said Fernandes.
The March deadline is slightly later than the initial target of December 2024. Fernandes said that while there are complexities, but was also optimistic about meeting the revised timeline.
What Comes Next?
Following the submission of its regularisation plan to Bursa Malaysia, Capital A would need to secure approval from Bursa Malaysia. After this it would need to convene an Extraordinary General Meeting (EGM) to gain shareholder endorsement, and then obtain confirmation from the High Court of Malaya.
In October this year, Capital A announced the termination of its Business Combination Agreement (BCA) with Aetherium for a proposed SPAC listing in the United States. The decision follows Aetherium’s receipt of a delisting determination from NASDAQ in June 2024.
The company stated that it remains committed to revisiting the possibility of listing its four core businesses, starting with its branding arm, in the U.S. market once its regularisation plan is fully executed.
Fernandes emphasized that the termination of the BCA was a strategic move to prioritize the regularisation process and ensure its timely completion, adding that the focus on exiting PN17 would help the company maintain operational momentum and prepare for future growth opportunities.
Financial Resilience Amid Challenges
In its latest fiscal report for the third quarter, Capital A Group reported a net profit of RM 2 billion ($444 million), a significant turnaround attributed to foreign exchange gains and travel demand, bringing the net profit for the first 9 months to RM 1.2 billion ($266 million).
Revenue for the third quarter rose by 15% year on year, reflecting growth in both domestic and international markets, supported by strong travel demand, lower fuel price per barrel and strengthening Malaysian Ringgit against USD. The company expects continued strong performance in the fourth quarter, driven by seasonal demand and capacity recovery.
Capital A’s diversification strategy extends beyond aviation. Speaking at the Skift Global Forum East in Dubai, Fernandes said the company’s non-aviation businesses, including logistics, engineering, catering, and digital services, are witnessing strong growth and would play a critical role in the group’s future.
He also said that the group is leveraging its resilience to expand into complementary sectors like logistics and fintech. Fernandes also spoke about his ambition to build a “low-cost Dubai” in Kuala Lumpur.
The airline plans to increase its operational fleet from 63 to 76 aircraft, supporting a growth in daily flights from 230 to 258, and boosting its network by adding 8 new destinations, expanding from 98 to 106 destinations in 2025.
