AirlinesBusiness

Capital A divests airline business to AirAsia Group in landmark deal

313
(Photo: AirAsia)
(Photo: AirAsia)

Capital A Berhad (Capital A) and the newly formed AirAsia Group Sdn Bhd have signed a conditional sale and purchase agreement for Capital A to divest its aviation businesses to AirAsia Group. The deal is valued at RM6.8 billion ($1.4 billion).

Under the agreement terms, Capital A will divest AirAsia Aviation Group Limited (AAAGL), comprising AirAsia subsidiaries in Thailand, Indonesia, the Philippines, and Cambodia. This will be fulfilled through AirAsia Group issuing new shares worth RM3 billion to Capital A. Capital A will then distribute RM2.2 billion of these new shares to its shareholders.

Additionally, Capital A will divest AirAsia Berhad (AirAsia Malaysia) for RM3.8 billion by having AirAsia Group assume RM3.8 billion of debt owed by Capital A to AirAsia Berhad.

“Today’s announcement is more than just a transaction, but a unique and time-sensitive opportunity to elevate our aviation business to the next level, while driving growth and profitability across core non-airline business portfolios for Capital A,” said Capital A CEO Tony Fernandes, who will also advise the newly formed aviation group.

The deal will see AirAsia X’s shares and listing transferred to AirAsia Group, creating an enlarged aviation entity. AirAsia X shareholders will receive shares in the new group, along with free warrants.

AirAsia Aviation Group CEO Bo Lingam stated the unification allows leveraging Airbus’ new long-range A321 models to “explore new destinations and pioneering new and underserved routes.”

Capital A shareholders will gain by unlocking an estimated RM6.8 billion in value from the aviation business divestment. After the deal, Capital A will retain businesses like aviation services, logistics, and digital ventures.

The transaction awaits regulatory approvals but promises a strategic realignment as Capital A pivots away from airlines while AirAsia Group consolidates its position as ASEAN’s largest low-cost carrier.

Written by
Dirk Andrei Salcedo

Dirk is the founder and editor-in-chief of Aviation Updates Philippines (AUP), a platform dedicated to providing the latest news and insights on the aviation industry in the Philippines. With a strong passion for aviation and a background in computer engineering, he manages all aspects of AUP, from website development to content curation.

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Newsletter

Featured Stories

Categories

Related Articles

Airlines

China Airlines finalizes order for ten Airbus A350-1000 aircraft

China Airlines has officially finalized its order for ten Airbus A350-1000 aircraft,...

Planemaker

Airbus reveals roadmap for future single-aisle aircraft

Airbus is pushing ahead with its vision for the future of commercial...

Airlines

Korean Air, Boeing, and GE Aerospace strengthen partnership

Korean Air is advancing its strategic partnership with Boeing and GE Aerospace...

Defense

Boeing selected to develop U.S. Air Force’s next-generation air dominance fighter

The US Air Force has officially selected Boeing to design, build, and...