AirAsia X (AAX) is likely to acquire Capital A Berhad’s aviation division for MYR 6.8 billion ($1.49 billion).
AAX announced that it has submitted the listing application and draft circular to Bursa Malaysia Securities Berhad, detailing its proposed purchases of Capital A’s full equity investment in AirAsia Aviation Group Limited (AAAGL) and AirAsia Berhad.
AAX also stopped the internal reorganization and took over the potential acquisitions directly to speed up the process.
The statement claimed the proposed purchases will be completed by the end of the year, creating an expanded AirAsia aviation company and marking a new era for the aviation powerhouse.
AAX shareholders can access Capital A’s aviation company worth MYR 6.8 billion ($1.49 billion) through a MYR 3 billion ($656 million) fresh share issuance with the planned acquisitions.
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It added that this investment gives them ownership in a mature and ongoing airline business operation with six established airlines and a new airline in Cambodia that form ASEAN’s largest short- and medium-haul network, consolidating AirAsia’s position as ASEAN’s largest low-cost carrier.
“As we enter the next phase of the proposed acquisitions, this strategic move is set to strengthen our market position and streamline AirAsia operations across the region,” said AirAsia X Chairman Fam Lee Ee. According to him, by integrating AirAsia Aviation Group’s extensive network and resources with AAX’s medium-haul capabilities, they aim to create a more cohesive and efficient airline group. He noted the synergistic benefits will not only enhance our operational and cost efficiencies but also provide a seamless travel experience for their guests as regional travel demand continues to grow. Furthermore, he opined that their shareholders stand to benefit significantly from this acquisition.
Capital A stated it submitted its EGM circular to Bursa Malaysia detailing the planned sale of its whole equity interest in AAAGL and AAB to AAX. A shareholder extraordinary general meeting (EGM) to approve the Proposed Disposals would be held 21 days after the circular is issued, the firm stated.
Capital A’s strategic objective to consolidate operations and focus on non-aviation company is supported by this key action, according to the statement. A new era for the new aviation group under AAX and Capital A Group’s aviation services and digital companies is expected by December if the proposed disposals are completed.
“The enlarged entity is expected to deliver improved financial performance, with increased revenue streams and cost savings from integrated operations, By ceasing the proposed internal reorganization, we are intent on our commitment to accelerate this acquisition and realizing its benefits as swiftly as possible,” he added. He also noted they anticipate that an enlarged aviation group will attract strong interest from investors, given their enhanced market position and the growth potential the combined aircraft orderbook presents for their expansion ambitions. This move aligns with our long-term vision of becoming a leading player in the global aviation industry,” he said.
Capital A’s strategic objective to consolidate operations and focus on non-aviation company is supported by this key action, according to the statement.
A new era for the new aviation group under AAX and Capital A Group’s aviation services and digital companies is expected by December if the proposed disposals are completed.
About AirAsiaX
AirAsia X is a low-cost, long-haul airline based in Malaysia. First service was from Kuala Lumpur International Airport in Malaysia to Gold Coast Airport in Australia on November 2, 2007, when it started operating. Australia and Asia are the destinations served by AirAsia X.
About Capital A
Capital A Berhad, doing business as AirAsia, is based close to Kuala Lumpur. In terms of destinations and fleet size, it is the biggest airline in Malaysia. Scheduled domestic and international flights are offered by AirAsia to over 166 locations across 25 countries.