Capital A Berhad remains optimistic about finalizing its Proposed Regularisation and Restructuring Plan by June 2025. The company has made significant strides in regulatory, financial, and operational areas, reinforcing its confidence in meeting this deadline.
A Material Uncertainty Related to Going Concern (MUGC) note was reported in its recent financial statements.
Capital A views this as a procedural issue tied to timing, not a sign of weakened business fundamentals.
Key Progress in Restructuring Efforts
Capital A has now achieved several milestones that highlight its recovery momentum.
Private Placement Nearing Completion: AirAsia X has almost finalized its RM1 billion private placement. A sovereign wealth fund, acting as the lead investor, is completing its internal approvals. Another investor has also expressed interest in participating.
Regulatory Approvals: The Securities and Exchange Commission (SEC) in Thailand will issue its decision letter by early May 2025.
Lender Support: Most lenders have approved the plan, with the remaining two expected to follow soon.
Aviation Business Disposal: This critical restructuring condition is nearing completion.
Shareholder Meetings: Capital A will hold Extraordinary General Meetings on May 7, 2025, to secure approval from shareholders and RCUIDS holders.
Fleet Reactivation: The Aviation Group aims to have all 250 aircraft operational by July 2025, marking a significant recovery milestone.
Financial Performance: The financial audit for 2024 is complete, and the first quarter of 2025 showed strong results, driven by high demand, lower fuel prices, and stronger Asean currencies.
Addressing the MUGC Note
The MUGC paragraph in Capital A’s audited financial statements has raised questions, but the company emphasizes that it reflects standard audit caution, not operational issues.
Tony Fernandes, CEO of Capital A, explained the situation. “After five tough years impacted by Covid-19, we’re proud to receive a true and fair view of our accounts from Ernst & Young.”
“The MUGC note is simply about the timing of our restructuring, particularly the RM1 billion placement for AirAsia X. It doesn’t indicate any weakness in our business.”
Fernandes reassured shareholders that the MUGC note is a procedural requirement when certain milestones are pending at the audit report’s issuance.
He added, “We’re making solid progress across all areas and remain confident in completing the restructuring successfully.”
Chief Financial Officer Mun Hui Teh gave further comment. “The MUGC note will be resolved once we meet the remaining conditions, such as regulatory clearance and the AirAsia X placement.”
“Financially, we’re seeing strong recovery signs, especially in Q1 2025. With growing investor confidence, we’re focused on exiting Practice Note 17 (PN17) and driving long-term growth.”
Broader Momentum and Growth Drivers
Capital A actively drives recovery through growing non-aviation activities and developing strategic partnerships.
AirAsia X Success: AirAsia X, a related party, has exited PN17 and is now profitable.
Non-Aviation Growth: Capital A’s non-aviation businesses saw a 29.7% revenue increase in 2024, returning to profitability.
Strategic Partnerships: A partnership with GE is progressing, with all 16 remaining aircraft expected to be operational by July. A new collaboration with Malaysia Airports under its updated ownership is set to boost margins.
Favorable Market Conditions: Lower oil prices, stronger Asean currencies, high load factors, and robust ancillary income are supporting recovery.
Looking Ahead
Capital A remains committed to transparency, regularly updating stakeholders as it progresses toward exiting PN17.
With strong financial indicators, strategic partnerships, and macroeconomic tailwinds, the company is well-positioned for sustainable growth.
The MUGC note is a minor hurdle in an otherwise promising journey toward a stronger future.
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