Capital A Bhd intends to list its 'brand management' unit, Capital A International (CAPI), on Nasdaq through a strategic business combination valued at US$1.15 billion with Aetherium Acquisition Corp, a special purpose acquisition company (SPAC) listed on Nasdaq under GMFI.
As part of this proposed business combination, Capital A aims to transfer its equity in Brand AA Sdn Bhd to CAPI and concurrently merge Aether Merger Sub Inc (the merger subsidiary) with GMFI.
The transaction consideration, totaling US$1.15 billion, will be satisfied through CAPI share issuance and a term loan novation to Brand AA.
Post-combination, CAPI is poised to go public on either NASDAQ or or the New York Stock Exchange (NYSE).
Integral to the proposal is the distribution of up to 51.0% of consideration shares to entitled shareholders, providing them with a direct investment avenue in Brand AA through their CAPI shareholdings.
Additionally, a loan novation will streamline group borrowings, with Capital A continuing to provide securities for the loan, contributing to the restructuring and alleviation of the aviation division's burden.
The primary motivation behind these proposals is the strategic unlocking of Brand AA's value, foreseeing an improvement in shareholders' equity.
This strategic focus aligns with Capital A's broader goal of streamlining core operations, particularly in aviation services and digital businesses.
The Nasdaq listing not only signifies a strategic move but also offers exposure to US capital markets, enhancing global visibility.
The financial dynamics of the deal, supported by an independent valuation from Brand Finance, justifies the transaction consideration of US$1.15 billion.
The proposals are expected to result in a pro forma enhancement of the group's shareholders' equity.
The proposed timeline involves applications to relevant authorities within the next three months, with completion targeted in Q1 2025, subject to approvals.
As part of Capital A's broader effort to regularise its financial condition, additional proposed disposals and gains on dilution of interest are in the pipeline.