(Reuters) -Malaysia’s Capital A, the owner of budget carrier AirAsia, said on Friday it was exploring listing on the Hong Kong stock exchange, as it looks to broaden access to global capital once it exits its financially distressed status.
The company, hard hit by pandemic travel restrictions, was classified by Malaysia’s stock exchange as financially distressed in 2022.
It expects a return to profitability this year after posting a loss for fiscal year 2024.
Its shareholders will need to approve a plan to exit the financially distressed status and Malaysia’s high court has to approve the firm’s planned capital reduction, Capital A Group CEO Tony Fernandes said in early March.
The company aims to have the status revoked by mid-2025. A shareholder meeting is set for May 7.
This would allow Capital A to sell its AirAsia aviation business to long-haul unit AirAsia X, which it announced a year ago to consolidate long and short-haul operations under a single AirAsia brand.
Shares in Capital A were up 5.7% to a near two-month high at 0.84 ringgit per share by 0451 GMT.
In a separate statement, Capital A reaffirmed its confidence in completing its proposed regularisation and restructuring plan by June 2025.
It was responding to the auditors of its full year financial results stating there was a material uncertainty related to the company’s ability to continue as a going concern.
“The inclusion of [that] paragraph is an audit requirement when certain milestones remain pending at the date of issuance of audit report — even when they are well on track. It does not reflect any concern about the strength of our business,” Fernandes said.
The potential Hong Kong listing is the “natural next step” and would allow the company to tap into deeper global and Mainland Chinese investor pools, Capital A said.
The plan comes at a time when Hong Kong’s equity capital markets are coming back to life after at least two years of flat-lining activity.
“Discussions are ongoing and Capital A is close to appointing an international investment bank to advise on the proposed listing structure and timeline,” the firm said, without sharing details.
Plans to initiate the formal process are subject to internal assessments and regulatory approvals, it said.
(Reporting by Shivangi Lahiri in Bengaluru, Lisa Barrington in Seoul; Editing by Sonia Cheema, Mrigank Dhaniwala and Sonali Paul)
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