Capital A Completes $226M Private Placement as AirAsia Restructuring Advances

Malaysia’s Capital A, the parent company of budget airline AirAsia, has successfully completed a private placement to raise 1 billion ringgit ($226 million), confirming its progress toward financial restructuring. Group CEO Tony Fernandes announced the completion of the placement at a press conference, addressing speculation about the process.

Reports surfaced last week suggesting that Saudi Arabia’s sovereign wealth fund was set to invest $100 million in AirAsia, with additional discussions underway with potential investors from Singapore and Japan.

Founded in 2001 with just two aircraft, AirAsia has since grown into one of Asia’s largest budget airlines. However, Capital A suffered severe financial setbacks due to pandemic-related travel restrictions, leading to its classification as PN17 (financially distressed) by Malaysia’s stock exchange. The company is now focused on exiting PN17 status to secure its market position.

Last week, Capital A received regulatory approval from Malaysia’s stock exchange to proceed with its PN17 exit strategy, a milestone Fernandes believes could be achieved by May. This would pave the way for Capital A to sell its aviation business to long-haul unit AirAsia X, a move announced a year ago to consolidate both short- and long-haul operations under the AirAsia brand.

To finalize the restructuring, Capital A requires shareholder approval, a high court’s endorsement for a planned capital reduction, and proof of two consecutive profitable quarters. The company reported profitability in Q4 and expects strong results in Q1, making May a realistic target for full PN17 removal.

Post-restructuring, Capital A intends to retain an 18% stake in the new AirAsia airline group while focusing on its non-aviation ventures, including logistics company Teleport and aircraft maintenance subsidiary Asia Digital Engineering.

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