Malaysia’s Capital A said on Monday (Jan 8) it intends to sell its aviation business to AirAsia X, with a goal of consolidating both long and short-haul airlines under the AirAsia brand.

The proposed deal involves the sale of AirAsia and AirAsia Aviation Group, which includes AirAsia units in Thailand, Indonesia, the Philippines and Cambodia, Capital A said, without disclosing any deal value.

Capital A said it needed to raise funds for business expansion, but is facing challenges due to its PN17 status, indicating financial distress.

The firm had been engaging with committed investors who strongly prefer a pure aviation play, it added.

“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 recognised for their intrinsic value and potential,” Capital A chief executive officer (CEO) Tony Fernandes said in a statement.

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

A NEWSLETTER FOR YOU

Friday, 8.30 am

Asean Business

Business insights centering on South-east Asia's fast-growing economies.

Sign Up

The group also named two deputy CEOs for the budget carrier as part of its corporate restructuring. 

Chester Voo will take up the role of deputy chief executive officer in charge of the airline operations, the company said in a statement on Monday. The company named former banker Farouk Kamal as deputy CEO, whose responsibilities include finance, aircraft leasing, investor relations and strategy. REUTERS, BLOOMBERG