Capital A Bhd has proposed to reduce its issued share capital by up to RM6 billion as part of a regularisation plan to exit its Practice Note 17 status.

Capital A said the proposed capital reduction would reduce the accumulated losses of the company "to the extent possible with a view to rationalising the balance sheet of the company to reflect more accurately the value of its underlying assets and thus the financial position of the company".

"The reduced accumulated losses of the company would also facilitate the enhancement of the credibility of the group with its bankers, customers, suppliers, investors and other stakeholders as well as provide a stronger platform for the future growth of Capital A Group," it said in a stock exchange filing.

Post completion of the proposed corporate exercises, the company said it would no longer be required to consolidate the consolidated net liabilities of AirAsia Aviation Group Ltd (AAAGL) and AirAsia Bhd (AAB), allowing Capital A to be on better financial footing.

"The disposal of the entire equity of AAAGL and AAB is in line with the company's strategic direction to focus on business activities that the company identified as viable, profitable and/or having growth potential, namely Capital A Aviation Services, logistics service under Teleport, digital business under MOVE Digital as well as the brand and intellectual property company under Brand AA Sdn Bhd," it said.

After the completion of the proposed corporate exercises, the group would strategically diversify from being one of the major low-cost carriers in Southeast Asia to a diversified ecosystem of aviation and digital services. This shift is designed to capture opportunities beyond traditional airline operations, directly responding to evolving consumer demands and technological advancements.

RHB Investment Bank has been appointed as the principal advisor to the company for the proposed regularisation plan. The proposed regularisation plan is expected to be submitted by Nov 31, 2024.