KUALA LUMPUR (Sept 13): AirAsia X Bhd (KL:AAX) is one step closer to its planned acquisition of the aviation business of Capital A Bhd (KL:CAPITALA), which will pave the way for its parent company to be lifted out of its Practice Note 17 (PN17) status.

In a bourse filing on Thursday, AAX said Bursa Malaysia has approved the listing and quotation of shares related to the acquisition.

The acquisition plan was announced by the medium-haul low-cost carrier AAX in April this year. Under the plan, it will take over Capital A's aviation business for RM6.8 billion.

AAX will issue new shares worth RM3 billion — 2.31 billion shares at RM1.30 each — to acquire AirAsia Aviation Group Ltd (AAAGL). At the same time, it will acquire AirAsia Bhd by assuming RM3.83 billion worth of debt that Capital A owed AAB.

Following the acquisition, AAX intends to issue new warrants, conduct a private placement and reduce its share capital. Bursa has also approved the listing and quotation of the respective warrants and placement shares.

AAX announced in August that upon approval obtained from Bursa Malaysia and dispatch of the circular to its shareholders, an extraordinary general meeting will be convened in 21 days. "The completion of the proposed acquisitions is set to be by end of this year, establishing an enlarged aviation group under the AirAsia brand, and signifying a new era for the aviation giant," its press statement read then.

Capital A fell into PN17 status, a categorisation for distressed entities, in January 2022.

At Thursday's closing bell, shares in Capital A rose two sen, or 2.7%, to 76 sen, valuing the group at RM3.27 billion. AAX settled three sen or 2.3% higher at RM1.31, giving the company a market capitalisation of RM586 million.