AirAsia X Simplifies Acquisition Strategy for Capital A’s Aviation Assets

AirAsia X (D7, Kuala Lumpur International) has opted to simplify its acquisition process by directly purchasing the aviation businesses of Capital A, foregoing the previously planned internal reorganisation through a new entity, AirAsia Group Berhad. This strategic pivot was detailed in a recent filing with Bursa Malaysia.

The decision to directly acquire Capital A’s aviation interests comes after careful consideration of the benefits versus the time constraints associated with the initial internal reorganisation plan. “The importance of an expedient completion of the proposed acquisitions to AirAsia X Group” was a critical factor influencing this change, as stated in the Bursa Malaysia announcement. As a result, the agreement for the internal reorganisation was mutually terminated on July 26, 2024.

Initially, AirAsia X had announced plans earlier this year to absorb Capital A’s aviation interests, which include AirAsia Bhd and AirAsia Aviation Group Ltd. The latter oversees operations of Indonesia AirAsia, AirAsia Cambodia, AirAsia Philippines, and Thai AirAsia. The original strategy involved establishing AirAsia Group Bhd to assume AirAsia X’s listing status. However, with the new approach, AirAsia X Berhad will directly step into this role, eliminating the need for the intermediary company, AirAsia Group Bhd.

This restructured acquisition is set to cost AirAsia X about MYR6.8 billion (USD1.47 billion). To finance this transaction, AirAsia X will issue 2.31 billion shares priced at MYR1.30 (USD0.28) each. Additionally, the deal includes taking on debts of MYR3.8 billion (USD820,000) that Capital A currently owes to AirAsia Bhd.

By streamlining the acquisition process, AirAsia X aims to finalize the purchase by the end of 2024, thereby consolidating its position in the aviation sector and allowing Capital A to concentrate on its non-aviation business interests. This move is anticipated to enhance operational efficiencies and strategic focus for AirAsia X as it continues to expand its footprint in the airline industry.

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