AirAsia X's board, headquartered in Kuala Lumpur International, has unveiled detailed plans for acquiring AirAsia Bhd, which operates AirAsia (AK, Kuala Lumpur International), and AirAsia Aviation Group, responsible for managing non-Malaysian AirAsia-branded airlines. This announcement also includes strategies for issuing complimentary warrants, conducting a private placement, and executing a share capital reduction following the finalization of the acquisition endeavor.
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AirAsiaAirAsia X’s board, headquartered in Kuala Lumpur International, has unveiled detailed plans for acquiring AirAsia Bhd, which operates AirAsia (AK, Kuala Lumpur International), and AirAsia Aviation Group, responsible for managing non-Malaysian AirAsia-branded airlines. This announcement, as per an April 26 filing with Bursa Malaysia, also includes strategies for issuing complimentary warrants, conducting a private placement, and executing a share capital reduction following the finalization of the acquisition endeavor.
The proposed acquisition will trigger an internal reorganization, consolidating seven airline entities under the AirAsia brands (including AirAsia X) into a fresh investment holding entity named AirAsia Group Sdn Bhd, previously known as AirAsia Aviation Group. The objective of this restructuring, highlighted in the filing, is to optimize synergies through centralized decision-making and streamlined network planning, particularly concerning fleet management and deployment. As of mid-April, the airlines slated for transfer to the new holding entity had approximately 400 aircraft on order (largely secured by AirAsia Bhd), with scheduled deliveries extending through 2035.
Both AirAsia Bhd and AirAsia Aviation Group Ltd are wholly owned subsidiaries of Capital A. Alongside the Malaysian AirAsia carrier, the airlines earmarked for transfer to AirAsia Group encompass AirAsia Cambodia, Thai AirAsia, AirAsia Philippines, Indonesia AirAsia, AirAsia X, and Thai AirAsia X. Each airline retains its distinct air operator’s certificate and will maintain its individual identity.
According to the filing, AirAsia Group Sdn Bhd has entered into two conditional share sale and purchase agreements with Capital A. These agreements entail a share sale and purchase agreement dated April 25, 2024, for acquiring a 100% equity interest in AirAsia Aviation Group Ltd for MYR3 billion ringgits (USD629 million), to be fulfilled through the issuance of 2,307,692,307 shares in AirAsia Group Sdn Bhd. Additionally, there exists a share sale and purchase agreement dated April 25 for acquiring a 100% equity interest in AirAsia Bhd for MYR3.8 billion (USD797 million), to be settled by assuming debt owed by AirAsia Bhd to Capital A. AirAsia Group Sdn Bhd is anticipated to issue 447,072,803 shares.
The reorganization will be executed via a members’ scheme of arrangement, wherein all ordinary shares in AirAsia X will be swapped for ordinary shares in AirAsia Group Sdn Bhd on a one-to-one basis. Consequently, AirAsia Group Sdn Bhd will inherit AirAsia X’s listing status on the Malaysian bourse, leading to AirAsia X’s delisting. Consequently, AirAsia X will transition into a wholly-owned subsidiary of AirAsia Group Sdn Bhd. These acquisition and reorganization plans are subject to approval from Bursa Malaysia and shareholders.
Following the reorganization, the board aims to introduce new warrants, conduct a private placement, and decrease share capital as follows:
- Issuing 223,536,402 complimentary warrants in AirAsia Group Sdn Bhd at a ratio of one warrant for every two shares. These warrants will have a term of five years from the date of issue, with the exercise price yet to be determined.
- Offering a private placement of shares in AirAsia Group Sdn Bhd valued at MYR1 billion (USD210 million). These shares will not be allocated to directors, major shareholders, executives, or affiliated individuals/entities. The proceeds are earmarked for a 24-month utilization period, with approximately half allocated for aircraft, engines, and parts funding, around 30% for settling AirAsia Bhd debt, and the remaining portion for general working capital.
- Reducing the issued share capital in AirAsia Group Sdn Bhd to MYR100 million (USD21 million) by nullifying paid-up share capital that is unrecovered or not backed by available assets.
Source: AirAsia
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