Shareholders of Malaysia’s Capital A, which owns AirAsia, have approved a capital reduction plan of up to 6bn Malaysian ringgits ($1.4bn), as the company aims to ditch its “financially distressed” status.
The company said that this vote represents a critical milestone in its proposed regularisation plan, designed to facilitate Capital A’s exit from Practice Note 17 (PN17) status, which was enforced by Malaysia’s stock exchange in 2022.
Capital A said that this reduction will allow it to “clean up its balance sheet” by offsetting the accumulated losses of the company. Last year these losses amounted to 475 million ringgits ($109.8 million), with the company making consecutive annual net losses in the previous years through 2019, last recording a net profit in 2018.
This proposed capital reduction was proposed last month by the company.
“This is a pivotal day for Capital A,” said Tony Fernandes, CEO of Capital A. “We are taking bold steps to complete our turnaround and move beyond PN17. We’ve been through tough times, but we’ve built powerful businesses that are now positioned for growth, and these exercises are critical to unlocking that next chapter.”
This also follows shareholder approved of the disposal of Capital A's aviation business to AirAsia X Berhad (AAX) last year. The company said this will enable it to “focus entirely on its non-aviation portfolio of high-growth businesses”.
Following this shareholder approval, it is on track to exit PN17 status by mid-2025.