(Reuters) -Malaysia’s Capital A said on Thursday it has cleared all conditions to sell its AirAsia aviation business to its medium-haul low-cost sister firm AirAsia X by December, which will unify seven airlines under a single banner.
All key conditions required for the disposal, including consent letters from creditors, Thailand Stock Exchange approval, and commitments to raise new capital, have been met, Capital A said in a statement.
AirAsia was founded in 2001 with two aircraft and has since become one of Asia’s largest budget airline operators. Capital A was hard hit by pandemic travel restrictions and classified by Malaysia’s stock exchange as PN17, or financially distressed. Post deal, the company plans exit the status by the end of this year.
“Over the last year, we have pushed through every approval and obstacle faced to get these deals done. We are now in the final chapter of what felt like a never-ending ordeal,” Tony Fernandes, Capital A CEO, said in a statement.
The unified group will be called AirAsia Group. Capital A will continue to focus on its travel and digital operations.
The parties now expect to complete other procedural requirements such as Capital A’s capital reduction and distribution and the listing of AirAsia X’s shares by December.
Capital A decided to divest its aviation unit in April last year, in a deal under which AirAsia Group would acquire AirAsia Bhd without paying a purchase price, as Capital A would transfer its outstanding debt to the airline operator.
In 2020, the company reported record full-year loss of 5.1 billion ringgit. ($1.21 billion). Since then, the company in fiscal year 2024 reported a loss of 475 million ringgit.
($1 = 4.2240 ringgit)
(Reporting by Kumar Tanishk in Bengaluru; Editing by Harikrishnan Nair)
