KUALA LUMPUR (April 30): Capital A Bhd may seek to re-acquire the 50% stake in ground-handling unit Ground Team Red Holdings Sdn Bhd (GTR) that will be sold to AirAsia X Bhd (AAX) in the ongoing restructuring exercise. 

Capital A CEO Tan Sri Tony Fernandes said this is part of the group’s effort in bolstering future growth for its Capital A Aviation Services (CAAS) business after the RM6.8 billion merger.

“[CAAS] are eyeing further growth and may, in time, seek to acquire AirAsia Bhd’s stake in GTR to add ground handling capabilities on top of venturing into airport ownership and development,” he said in a letter to shareholders filed to Bursa Malaysia.

The remaining 50% stake in GTR is owned by Singapore’s SATS Ltd.

The merger, announced last week, will see Capital A divesting AirAsia Bhd and AirAsia Aviation Group Ltd (AAAGL) to AAX in a share and debt settlement deal.

The divestment is deemed a major disposal as the aggregate revenue from AirAsia Bhd and AAAGL constitute more than 70% of Capital A’s total revenue.

Therefore, Capital A is required under Bursa Malaysia’s Listing Requirement to regularise such conditions within 12 months, failing which the stock may be suspended or delisted.

Apart from the potential acquisition of GTR, Capital A’s aviation services division will also house its aviation engineering unit Asia Digital Engineering (ADE), food services company Santan Food Sdn Bhd, consulting firm AirAsia Consulting and shared service centre DARTS.

“This vertical [aviation services] leverages our 22 years of expertise and best practices to become Asean’s leading one-stop aviation-support services provider, through cost-efficiency and service excellence,” said Fernandes on Tuesday.

Last week, Fernandes confirmed that AirAsia Consulting is bidding to buy SriLankan Airlines, eyeing to raise its own capital to potentially venture into airlines or airports beyond AirAsia’s Asean home turf.

Fernandes also explained to shareholders that the restructuring will not only address Capital A’s negative equity situation to uplift its Practice Note 17 (PN17) status, but also set the foundation for future growth.

“The market only sees our aviation business but we have built strong companies which will drive Capital A after aviation is divested. And so we have strategically reorganised into five distinct business verticals, with perfect clarity of what Capital A is today,” he said in the letter.

Apart from the airlines and aviation, the other three verticals are logistics and courier businesses Teleport, online travel agency AirAsia MOVE, and a brands management company Capital A International, which will be listed in the US via a special purpose acquisition company (SPAC).

Read also:
AirAsia will charge 'sustainability fee soon' in airfares