KUALA LUMPUR (Oct 14): Shareholders of Capital A Bhd (KL:CAPITALA) have approved the proposed disposal of its aviation business, worth some RM6.8 billion, to AirAsia X Bhd (KL:AAX).

At the company's extraordinary general meeting (EGM) on Monday, the disposal resolutions were passed with shareholders and proxies attending the meeting holding 99.97%, voting in favour.

The corporate exercise intended to facilitate Capital A’s exit from Practice Note 17 (PN17) status is now pending AAX shareholders’ approval at its EGM on Oct 16 (Wednesday).

Capital A chief executive officer Tan Sri Tony Fernandes said, via his LinkedIn account, that it was a great day for the airline group. “After five long years of Covid I see light at the end of this dark tunnel.”

“The shareholders approved by 99.97%. We are almost at the finish line. If AirAsia X shareholders approve it, then we create a very powerful aviation group and Capital A, which has huge potential growth.”

“How we have survived Covid is a testament to the Allstars [AirAsia’s employees], and if shareholders approve on Wednesday all companies including AirAsia X will come out of this far stronger than before Covid. Resilience, innovation and a fierce determination has gotten us this far,” Fernandes wrote.

In a filing statement, Fernandes said separating the aviation and non-aviation businesses would allow the group to sharpen its focus on maturing the high-growth aviation support services and digital businesses.

“Capital A’s broader strategy is aimed at developing technology-driven aviation services and digital businesses that will support the significant anticipated growth in travel demand,” he noted.

The other key resolution, involving the distribution of AAX shares or 73.33% of the total AAX shares that Capital A would receive from the proposed disposal to its shareholders, was also passed with 99.97% voting in favour.

Pertaining to this, Capital A said it will seek a court order to approve the planned reduction and repayment of the share capital exercise, also pending approval from the holders of the company’s Redeemable Convertible Unsecured Islamic Debt Securities (RCUIDS) that was scheduled to meet on Monday (Oct 14).

Capital A also said these critical steps will enable the company to achieve a clean balance sheet and focus on submitting its regularisation plan before the year’s end, with the aim of exiting PN17 status.

At Monday’s closing bell, shares in Capital A settled down one sen or 1.07% to 92.5 sen, giving it a market capitalisation of RM3.99 billion, while shares in AAX were down 0.6% or one sen to RM1.75, giving it a market capitalisation of RM782.38 million.