Malaysia-based Capital A Berhad has reaffirmed its confidence in completing its proposed regularization and restructuring plan by June 2025, citing continued progress across key regulatory, financial, and operational milestones.

The firm said in a statement on Friday that the MYR 1 billion ($230 million) private placement for its budget airline AirAsia X is close to completion, with a sovereign wealth fund as the lead investor who is currently finalizing its internal clearance. A letter from another investor confirming interest to participate in the private placement has also been received.

Meanwhile, the decision letter from the Securities and Exchange Commission (SEC), Thailand is expected to be received by the first week of May.

According to the statement, majority of lenders’ approvals have been secured, with the remaining two expected soon.

The aviation business disposal, a key condition of the restructuring, is moving towards conclusion.

The extraordinary general meetings to obtain the approval from shareholders and RCUIDS holders for the proposed regularization plan will be held on 7th May 2025.

Meanwhile, the financial audit for the Financial Year Ended December 2024 has been completed, while the first quarter of financial year 2025 delivered a strong performance, driven by robust demand, weakening fuel prices and the strengthening of key ASEAN currencies.

The Aviation Group targets to reactivate all its 250 aircraft by July, which would mark a major recovery milestone.

The group said it remains steadfast and positive on its outlook despite the inclusion of a material uncertainty related to going concern (MUGC) paragraph in the company’s latest audited consolidated financial statements – which the group views as a procedural outcome tied to timing, and not a reflection of deterioration in its business fundamentals.

“I’m very proud that after five challenging years of Covid-19, we’ve once again received a true and fair view of our accounts from Ernst & Young,

“While EY draw attention to the timing of our restructuring — particularly the MYR 1 billion ($230 million) placement for AirAsia X — this reflects the scale and significance of the plan, not any weakness in our fundamentals,” said Tony Fernandes, Chief Executive Officer of Capital A.

“We want to assure our shareholders that the inclusion of the MUGC paragraph is an audit requirement when certain milestones remain pending at the date of issuance of audit report — even when they are well on track. It does not reflect any concern about the strength of our business,

“In fact, meaningful progress is being made across all fronts, and we remain confident in completing all components of our restructuring plan successfully,” he added.

The firm’s Chief Financial Officer Mun Hui Teh also said that based on discussions with its external auditor, the MUGC paragraph will be resolved upon fulfilment of the remaining key conditions precedent — namely, regulatory clearance and completion of the MYR 1 billion ($230 million) placement for AirAsia X.

“From a financial standpoint, we are seeing strong indicators of recovery,

“The first quarter of 2025 was particularly encouraging, and with investor confidence solidifying, we are focused on delivering a clean exit from Practice Note 17 (PN17) and positioning Capital A for long-term growth,” she added.

According to the statement, group-wide momentum continues to build with AirAsia X, Capital A’s related party, has exited PN17 and is now profitable.

Capital A’s non-aviation businesses are also posting a 29.7 percent increase in revenue year-on-year, returning to profitability in FY2024.

Meanwhile, favourable conditions and strategic partnerships are also supporting growth.

For instance, the firm’s engine provider GE partnership is progressing well with all 16 remaining aircraft are expected to be operational by July.

Besides, new partnership with Malaysia Airports under its new ownership structure is expected to enhance margins.

Macroeconomic tailwinds, including lower oil prices and favorable currency movements, are aiding recovery.

High load factors above pre-pandemic levels and high-yield ancillary income also contribute to a stronger margin outlook.

The MUGC paragraph reflects standard audit caution amid pending restructuring steps and is not an indication of operational weakness, said the statement.

The group said it remains committed to updating stakeholders as it advances toward exiting PN17 and charting a new chapter of sustainable growth.

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