AirAsia brand and aircraft leasing units eye $1bn valuation on Nasdaq

Capital A Bhd, the Malaysian corporation, is planning a Nasdaq listing for its AirAsia brand royalty and aircraft leasing units through a merger with Aetherium Acquisition Corp (GMFI), a special purpose acquisition company (SPAC). The proposed merger aims to achieve a valuation of US$1 billion, as formalized in a letter of intent (LOI) released today.

The merger will bring together Capital A International (CAPI), a newly established entity from the Cayman Islands by the budget airline operator, and Aetherium Acquisition Corp. After the formation, CAPI is set to acquire Brand AA Sdn Bhd, a brand management company and registered proprietor of all AirAsia brand rights, and Fleet Consolidated Pte Ltd from Capital A.

Brand AA Sdn Bhd operates under a master brand licensing agreement dated May 31, in which it collects royalty fees from Capital A’s aviation division, AirAsia Aviation Group Ltd. On the other hand, Fleet Consolidated Pte Ltd is responsible for procuring and delivering the necessary aircraft for the aviation group in line with an agreed allocation plan.

Capital A Bhd’s CEO Tan Sri Tony Fernandes believes that this move into American financial markets will expedite their strategic plan by broadening their shareholder base and boosting their global reputation. In accordance with the LOI terms, Capital A plans to divest all shares in Capital A International.

The completion of this merger depends on obtaining regulatory approvals and is indicative of a mutual interest in future collaboration between Capital A and Aetherium Acquisition Corp.

InvestingPro Insights

In light of the proposed merger between Capital A International (CAPI) and Aetherium Acquisition Corp, InvestingPro provides some valuable insights.

InvestingPro Tips indicate that CAPI has been consistently increasing its earnings per share, implying a strong financial performance. Furthermore, analysts anticipate sales growth for the company in the current year, which could be a positive indicator for potential investors. However, it should be noted that the stock has taken a significant hit over the last week and the company’s short-term obligations exceed its liquid assets, which could pose some financial risks.

InvestingPro Data further reveals that CAPI has a highly commendable P/E Ratio (Adjusted) of 4.55 as of Q3 2023, and a strong Operating Income Margin of 86.88%. The company’s Return on Assets stands at 16.21%, indicating efficient use of its assets to generate earnings.

These insights are part of the comprehensive metrics and tips provided by InvestingPro, which includes a total of 13 tips for CAPI and a wealth of real-time data for numerous companies. For more detailed insights, consider exploring the InvestingPro product.

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