Budget airline AirAsia’s parent company, Capital A (CAPI.KL), announced on Wednesday its intention to list its brand management business on the Nasdaq through a deal with special purpose acquisition company Aetherium Acquisition Corp (GMFI.O).
According to a stock exchange filing, under the terms of the deal, Aetherium Acquisition will acquire all the issued and outstanding share capital of Capital A International, forming a new listed entity.
As part of the transaction, Capital A International will acquire 100% ownership of Brand AA, the entity holding all rights to the AirAsia brand, as well as Fleet Consolidated, an aircraft leasing company, from Capital A. The filing indicates that Capital A International aims to generate revenue through brand royalty and aircraft leasing activities.
The filing also highlights Capital A’s anticipation of a one-off gain from the proposed combination, emphasizing the opportunity to unlock the value of the AirAsia brand. Aetherium Acquisition, functioning as a blank-check firm, currently holds $29.99 million in its trust account, subject to underwriting fees.
Both Aetherium and Capital A International intend to pursue financing through private investments in Aetherium’s shares, known as private investment in public equity (PIPE). This strategic move aims to bolster their financial position and support the proposed business combination.
The co-founders of AirAsia, Tony Fernandes and Kamarudin Meranun, launched the airline in 2001 with just two aircraft. Since then, AirAsia has expanded to become one of Asia’s largest airlines, operating a fleet of approximately 200 planes across Southeast Asia and China. However, pandemic-related travel restrictions in Asia led to financial challenges, prompting Bursa Malaysia Securities to classify Capital A as a financially distressed company last year.
In response, Capital A has been exploring fundraising options for a planned U.S. listing. Despite the challenges, shares of Capital A have demonstrated resilience, climbing 32% year-to-date. This proposed listing on the Nasdaq represents a strategic move to tap into the capital markets in the USA, providing the company with new avenues for growth and expansion.