Capital A Berhad, the parent company of AirAsia and a leading aviation and digital conglomerate, has cleared a significant hurdle in its bid to exit the Practice Note 17 (PN17) classification. The company announced today that it has received regulatory approval for its proposed regularization plan, marking a major step toward financial recovery and future growth.
PN17 is a classification on Bursa Malaysia that flags companies facing financial distress. Companies under this designation are required to submit a comprehensive plan to restructure their finances and address their challenges to ensure they remain viable entities.
Capital A was categorized under PN17 in January 2022, following the severe financial impact of the COVID-19 pandemic on its aviation business. The classification highlighted the need for substantial financial restructuring to stabilize the company’s operations.
Capital A’s regularization plan, submitted to Bursa Malaysia, has been approved in principle. The plan outlines strategies to improve the company’s financial standing, reduce debts, and ensure long-term profitability.
Key elements of the plan include:
Debt Restructuring: Negotiations with creditors to restructure existing debts into manageable repayment schedules.
Fundraising Efforts: Issuance of new shares and equity-linked instruments to raise fresh capital.
Asset Monetization: Disposal of non-core assets to strengthen liquidity.
Business Diversification: Expanding its digital and logistics businesses, including AirAsia SuperApp and Teleport, to reduce reliance on traditional aviation revenue.
The approval is a testament to the strength and viability of our recovery plan, said Tan Sri Tony Fernandes, CEO of Capital A. We are committed to emerging from PN17 stronger, more resilient, and more diversified.
Capital A has been showing signs of recovery, driven by the rebound in air travel demand and the growth of its digital businesses. The company’s latest financial results indicate a steady improvement in revenue and profitability.
AirAsia, its flagship airline, has seen a strong resurgence in passenger numbers as travel restrictions ease globally. Meanwhile, its digital platforms, including AirAsia SuperApp and logistics arm Teleport, continue to gain traction in the market, providing new revenue streams.
The announcement has been met with optimism by investors and market analysts. Capital A’s stock saw a significant uptick following the news, reflecting confidence in the company’s ability to execute its recovery plan successfully.
Analysts believe the approval of the regularization plan paves the way for Capital A to regain its position as a leading player in the aviation and digital industries. This is a crucial step for Capital A, and it signals the company’s commitment to addressing its financial challenges head-on, said a market analyst from RHB Research.
With the regulatory green light secured, Capital A will focus on implementing its regularization plan. The company aims to complete the restructuring process and officially exit PN17 by the end of 2025.
The successful implementation of the plan will allow Capital A to regain its full listing status on Bursa Malaysia, enhancing its ability to attract investments and capitalize on growth opportunities.
The PN17 exit plan represents more than just financial restructuring for Capital A it signifies a fresh start. The company’s ability to navigate through financial distress while simultaneously expanding its digital ecosystem demonstrates its resilience and adaptability.
As Capital A moves closer to exiting PN17, its future looks promising, with plans to further diversify its business portfolio and leverage technology to create new revenue streams. The approval of its regularization plan is a clear signal that the company is on the right track toward a stronger, more sustainable future.
