Capital A Berhad to Sell Airline Unit to AirAsia

Malaysia Capital A Berhad said on Jan 8 that it plans to sell its airline business to AirAsia. The proposed deal includes the acquisition of AirAsia Aviation Group Ltd, which includes AirAsia Bhd and AirAsia's operations in Thailand, Indonesia, Philippines, and Cambodia, Capital A. said, without disclosing the value of the deal.

Capital A stated that it needs funds to expand its business but is in trouble due to its PN17 status, which indicates financial problems. The company also said it has partnered with investors who are very interested in pure-play aircraft.

"We are confident that by separating the aviation business from Capital A, the non-aviation businesses within the group, which we feel are currently undervalued by the market, will also be recognized for their intrinsic value and potential," Capital A CEO Tony Fernandes said in a statement.

After the completion of the aviation disposal, Capital A plans to present a PN17 regularisation plan by June 30.

Capital A Berhad, operating as AirAsia, is a Malaysian low-cost airline headquartered near Kuala Lumpur. It is the largest airline in Malaysia in terms of traffic volume and departures. AirAsia operates domestic and international flights to over 165 destinations in 25 countries.