Capital A evaluating all fundraising options ahead of planned New York listing

MALAYSIA’S Capital A is currently evaluating different fundraising options ahead of a planned listing in the United States, with the aviation group still trying its best to be taken off a list of financially distressed firms by Malaysia’s stock exchange.

Capital A chief executive officer Tony Fernandes said that the management is looking at various fundraising options, including private placement, a direct listing, or a listing via a merger with a special purpose acquisition company.

He gave this update at an annual general meeting (AGM) on Thursday (June 16) when asked about the group’s plans to list either its airline or digital businesses in New York. “Listing in the US market would be attractive given the liquidity and the diverse investor reach that it can provide,” he said.

Capital A, previously known as AirAsia Group, was among the aviation firms badly affected by the strict travel restrictions in Asia due to the Covid-19 pandemic. In January this year, Bursa Malaysia classified the company as a PN17 company, or one that is financially distressed.

On the group’s effort to shake off this unwanted status, Fernandes said that a clean audit report by auditors Ernst & Young was tabled at the AGM and received by shareholders, denoting confidence in Capital A’s ability to continue to do business.

“The clean audit report is a key step forward to expedite removal of PN17 status which we are confident of exiting in the coming months. We are confident of meeting the deadline to submit the (regularisation) plan to Bursa Malaysia by early January 2023,” he said in a media statement.

Fernandes added that the PN17 regularisation plans are on track. The management team is developing these plans, taking into consideration multiple solutions without proposals for capital dilution or equity raising.

The group has been in the red for the past 2 years, posting a net loss of RM283 million (S$89 million) for the 2019 financial year, and RM5.89 billion for the 2020 financial year.

Last month, Capital A reported a net loss of RM1.08 billion for the first quarter ended March 31, which was a 10.35 per cent larger loss compared with the same quarter in 2021.

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However, the group revenue for the first 3 months of 2022 jumped 153 per cent year-on-year to RM812 million, largely due to the reopening of international borders and a significant pick-up in air travel.

With demand for air travel on the rebound, Fernandes noted: “Our airlines have strategic plans in place to paint the skies red once again with a leaner and more robust model for a successful and viable operation for the future.”