AirAsia Capital A Seeks Shareholder OK for $1.36B Equity Reduction

Malaysia’s Capital A is seeking shareholder approval for a capital reduction of up to MYR6 billion (USD1.36 billion) to offset accumulated losses and strengthen its balance sheet. The proposal is part of the company’s broader financial restructuring under its Practice Note 17 (PN17) status, which applies to listed firms in financial distress.

In a filing to Bursa Malaysia on April 15, Capital A announced it will hold an extraordinary general meeting on May 7 to vote on the capital reduction. If approved, the plan will then be submitted to Malaysia’s High Court for confirmation, with completion targeted by June 2025.

“This regularisation plan puts us on a stronger path to long-term value creation,” said Capital A CEO Tony Fernandes, expressing optimism about shareholder support.

The capital write-down is one element of a multi-step regularisation plan required under PN17 rules. These regulations mandate that affected companies outline a strategy to restore financial health or face potential delisting. Following the capital reduction, Capital A’s shareholder equity will stand at approximately MYR742.1 million (USD168.4 million).

Another key step in the plan is the divestment of Capital A’s aviation business to AirAsia X Berhad, which shareholders have already approved. Despite the sale, Capital A’s primary stakeholders, Kamarudin Meranun and Tony Fernandes, will retain significant financial interests in the AirAsia-branded short-haul carriers through direct and indirect holdings in AirAsia X.

The move will allow Capital A to focus on expanding its non-aviation portfolio, which includes high-growth ventures in logistics, fintech, and digital services.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com