KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
AirAsia X Bhd (KL) announced on Friday that it will directly acquire Capital A Bhd's (KL) aviation business, bypassing the previously proposed internal reorganisation that involved setting up a new company (NewCo). This decision aims to expedite the takeover process.
Key Points:
- Direct Acquisition: AirAsia X (AAX) will proceed with the acquisition of Capital A’s aviation business directly, foregoing the establishment of a NewCo. This change is intended to expedite the acquisition process.
- Reason for Change: The decision to abort the proposed internal reorganisation and terminate the agreement was based on weighing potential benefits against the time required for implementation. A critical factor was the importance of quickly completing the acquisition.
- Original Proposal: On April 25, AAX announced plans to take over Capital A’s aviation business — under AirAsia Bhd (AAB) and AirAsia Aviation Group Ltd (AAAGL) — through an internal reorganisation. The proposed reorganisation involved setting up a NewCo to assume AAX's listing status.
- Acquisition Details:
- AAX proposed to acquire the aviation business for RM6.8 billion.
- AAX planned to issue new shares worth RM3 billion (2.31 billion shares at RM1.30 each) to acquire AAAGL.
- AAX proposed to acquire AAB for RM3.8 billion, which included assuming RM3.8 billion of Capital A’s debt owed to AAB.
- The deal values AAAGL's equity interest at between RM2.7 billion and RM3.5 billion and AAB's equity interest at between RM3.48 billion and RM4.37 billion.
- Termination of Agreement: The group and NewCo mutually terminated the internal reorganisation agreement. AAX will replace NewCo in the acquisition deal.
- Investment Adjustment: AAX plans to grant Singapore-based Garynma Investments Pte Ltd, the vehicle of former AAX director Datuk Lim Kian Onn, the rights to subscribe to 12% of AAX's enlarged share base upon acquisition completion, down from the previously proposed 15%.
- Market Reaction:
- Shares in AAX ended nine sen or 6.16% higher at RM1.55 on Friday, valuing the group at RM692.96 million.
- Capital A shares closed three sen or 3.70% higher at 84 sen, with a market capitalisation of RM3.62 billion.
This strategic shift aims to streamline the acquisition process, ensuring a faster integration of Capital A’s aviation assets into AirAsia X, ultimately strengthening the group’s position in the aviation industry.
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