Capital A seeking Nasdaq monetisation

PETALING JAYA: Capital A Bhd has signed a letter of intent (LoI) with Nasdaq-listed special-purpose acquisition company (SPAC) Aetherium Acquisition Corp (GMFI) for a proposed business combination involving GMFI and Capital A International (Capi), a special-purpose entity to be formed by the group.

The forming of Capi would be according to the laws of the Cayman Islands, and the proposed business combination would entail the acquisition of all the issued and outstanding share capital of Capi by GMFI, resulting in Capi becoming a new publicly listed company on Nasdaq.

GMFI is ascribing to Capi an indicative value of US$1bil for the purpose of the proposed initiative, based on an independent valuation of the AirAsia brand.

Upon its incorporation, Capi is intended to acquire 100% equity interest in Brand AA Sdn Bhd, the registered proprietor for all the rights in AirAsia brand, and 100% equity interest in Fleet Consolidated Pte Ltd, which will primarily be responsible for the procurement and delivery of the requisite aircraft for the aviation group based on the agreed allocation plan.

GMFI will in turn acquire up to 100% of the outstanding equity securities of Capi from Capital A.

Capital A sees the proposal as an opportunity for it to unlock the value of the AirAsia brand, and the group is expecting to record a one-off gain from the proposed brand combination.

This is anticipated to improve the shareholders’ equity of the group in its effort to regularise its financial conditions, said Capital A in a bourse filing yesterday.

Upon the completion of the proposal, the company said it will have exposure to the capital markets in the United States through its listing on Nasdaq.

“The proposed business combination will result in the AirAsia brand and the leasing businesses of the group being listed and traded on Nasdaq.

“Capital A will also be able to indirectly participate in the profit of the disposed businesses via its holding of the consideration shares and the consideration securities post completion of the proposed business combination,” it said.

While acknowledging that it would lose a source of revenue and potential profit contribution from the royalty income from the use of the AirAsia brand if the proposal materialises, Capital A said it is expecting to realise a pro-forma gain arising from the proposed business combination which is expected to improve the shareholders’ equity of the group in its effort to regularise its financial conditions.

The group’s chief executive Tan Sri Tony Fernandes commented that the proposal represents Capital A’s first step in venturing out of its Asean home ground.

He said: “We are confident that the exposure of the US financial markets and Nasdaq listing would help us accelerate the delivery of our strategy as we improve access to capital, broaden our shareholder base and meaningfully raise our profile globally.”

GMFI, meanwhile, is a Delaware SPAC which acts to acquire businesses in any industry or geographical location.

It is formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganisation, or other similar business combination with one or more businesses.

GMFI chief executive Jonathan Chan said the initiative will present investors with the opportunity to tap into the growth of the Asean region with a high-quality profitable asset and strong management team.

In a separate filing, Capital A noted Bursa Malaysia has granted it an extension of time up to Dec 31, 2023 to submit its regularisation plan to the regulatory authorities.