AirAsia Parent Capital A Secures $226M Private Placement, Eyes Exit from PN17 by May

Malaysia’s Capital A, parent company of budget airline AirAsia, has successfully raised 1 billion ringgit ($226 million) through a private placement, CEO Tony Fernandes confirmed Monday. The company is now moving closer to completing its reorganization plan and exiting financially distressed PN17 status.

Fernandes declined to provide further details but emphasized that the placement was finalized despite various reports. Bloomberg recently reported that Saudi Arabia’s sovereign wealth fund is set to invest $100 million in AirAsia, with additional discussions ongoing with investors from Singapore and Japan.

Founded in 2001 with just two aircraft, AirAsia has grown into one of Asia’s leading low-cost carriers. However, parent company Capital A faced severe financial strain during the pandemic and was classified as PN17. Last week, Malaysia’s stock exchange approved its exit plan, and Fernandes stated that the company could officially shed its PN17 status by May.

To achieve this, Capital A shareholders must approve the exit plan, Malaysia’s high court must sanction a capital reduction, and the company must demonstrate two consecutive profitable quarters. Fernandes noted that the fourth quarter was already profitable and expressed confidence that the first quarter would be as well.

Once out of PN17, Capital A plans to sell its AirAsia aviation business to AirAsia X, consolidating short- and long-haul operations under one brand. The company will retain an 18% stake in the new AirAsia airline group while focusing on its non-aviation businesses, including logistics firm Teleport and aircraft maintenance provider Asia Digital Engineering.

With a successful turnaround strategy in motion, Capital A is poised for a stronger financial future, reaffirming AirAsia’s position in the competitive aviation market.