AirAsia X Berhad (KLSE:AAX) entered into a non-binding letter of offer to acquire AirAsia Berhad and AirAsia Aviation Group Limited from Capital A Berhad (KLSE:CAPITALA) on January 8, 2024. AirAsia X Berhad (KLSE:AAX) has signed a conditional sale and purchase agreement to acquire AirAsia Berhad and AirAsia Aviation Group Limited from Capital A Berhad (KLSE:CAPITALA) for CNY 6.8 billion on April 25, 2024. Under the terms of agreement, AirAsia Group?s acquisition amounting to CNY 6.8 billion, to be fulfilled with shares and debt settlement. Under the terms of the agreement and subject to requisite approvals, the Transaction includes two parts: The divestment of AirAsia Aviation Group Limited (AAAGL), consisting of AirAsia subsidiaries in Thailand, Indonesia, the Philippines and Cambodia, will be fulfilled through the issuance of new AirAsia Group shares to Capital A worth CNY 3 billion. Following this divestment, Capital A will immediately distribute-in-specie CNY 2.2 billion worth of the newly issued AirAsia Group shares to Capital A shareholders. Upon the completion of the proposed divestment and AirAsia X proposal, Capital A is expected to retain 18.39% of the enlarged issued shares of AirAsia Group. The divestment of AirAsia Berhad, otherwise known as AirAsia Malaysia, for CNY 3.8 billion, to be satisfied by AirAsia Group?s assumption of CNY 3.8 billion of debt owed by Capital A to AirAsia Berhad.As of March 13, 2023, the parties have mutually agreed to extend the negotiation period to execute the definitive agreement for the acquisition until April 15, 2024. Following the proposed transaction, AirAsia Group will also issue free warrants to you, our existing shareholders, as gratitude for your continued support. With the free warrants that are given exclusively to you as an existing shareholder, you will also gain the opportunity increase your equity participation and be a part of the future growth of this enlarged aviation business, which will have a much fortified financial foundation that will be achieved before the proposed acquisitions, effectively increasing the financial strength of the entity you will be a part of. As of April 9, 2024, the parties have mutually agreed to extend the negotiation period to execute the definitive agreement for the acquisition until April 30, 2024. This landmark agreement, approved by the boards of Capital A and AirAsia X, is expected to catalyse AirAsia to its next growth phase to become the world?s first low-cost network carrier and redefine the aviation industry landscape.

Capital A?s shareholders? equity to turn positive for the first time in 14 quarters following the divestment, while AirAsia X's shareholders? equity to also strengthen post-transaction. Capital A shareholders stand to benefit significantly as the proposed divestment is expected to unlock RM6.8 billion in value of Capital A's aviation business, more than double the current market capitalisation of the group. Following the divestment and the distribution-in-specie of RM2.2 billion worth of new AirAsia Group shares, Capital A shareholders will maintain direct ownership in the combined aviation businesses, ensuring access to future growth opportunities.