In a statement issued to the media today, the company said it has signed a non-binding letter of offer with AirAsia X Bhd (AAX) to dispose of AirAsia Bhd and AirAsia Aviation Group Ltd, its subsidiaries in Thailand, Indonesia, the Philippines and Cambodia.

Capital A CEO Tony Fernandes said the company is ready to grow but it needs to raise funds for business expansion.

“But gaining access to capital has been challenging due to Capital A’s Practice Note 17 (PN17) status,” he said.

He said the company has been engaging “committed investors” who have expressed a strong preference for a pure aviation play.

Capital A will achieve this by consolidating its long and short-haul airlines under the AirAsia brand, he added.

“Following the disposal, the aviation business is poised to benefit from focused management and a well-defined strategic direction, which will boost the aviation business’ capacity to seize growth opportunities, expand market share and achieve enhanced profitability,” Fernandes said.

He expressed confidence that the move to separate the aviation and non-aviation businesses would enable both to be “recognised for their intrinsic value and potential”.

He said Capital A companies such as Teleport (logistics), Capital A Aviation Services (maintenance, repair and operations and inflight services) and Move Digital will also be raising capital.

The company said that on completion of the disposal of the aviation business, Capital A is committed to present a comprehensive PN17 regularisation plan by June 30, 2024.

Capital A was declared a PN17 company in July 2020 after its external auditors Ernst & Young raised concerns about its audited financial statements and shareholders’ equity.