AirAsia chief prepares runway for New York Spac listing

Tony Fernandes, the Malaysian tycoon behind budget airline AirAsia, is planning to raise more than $1b in debt and equity for his Capital A conglomerate and preparing to list some of its businesses through a blank-cheque company in New York. The entrepreneur has agreed a deal with Aetherium Acquisition, a special purpose acquisition company trading on Nasdaq, and plans to list several businesses through it next year, according to two people familiar with the deal. They include a new business extending the AirAsia brand to companies hoping to start airline franchises in developing countries. AirAsia, which Fernandes bought from the Malaysian government in 2001 for less than $1 and turned into one of the region’s largest low-cost carriers, has since diversified into multiple business lines. The Kuala Lumpur-listed group was renamed Capital A last year to reflect its broadening portfolio, which includes a fintech “super app” called Move, an aviation consultancy arm, logistics business Teleport and airline engineering and maintenance services provider Asia Digital Engineering. The Spac deal would be a significant test of investor appetite for the AirAsia brand after the group underwent a dramatic restructuring to rescue its debt-laden business during the pandemic. As of 2021, Capital A has been classified as a distressed company by the Malaysian government, a categorisation known as Practice Note 17 that subjects companies to greater regulatory scrutiny. It has applied to exit PN17 status. Capital A has come under focus in the past over its accounting practices, liquidity constraints and debt levels. While those levels have fallen back since hitting highs of more than $15bn during the Covid-19 pandemic, levels are still elevated at $5.1bn compared with its market capitalisation of $760mn. Capital A said $500mn of that was bank debt, while the rest comprised aircraft leases.<br/>