The High Court of Malaya has okayed Capital A to reduce its share capital by MYR5.5 billion ringgit (USD1.4 billion). The company said in a statement that the move enables it to eliminate accumulated losses and brings it closer to exiting its Practice Note 17 (PN17) financial distress status.

The regularisation plan will formally conclude once the airline files the sealed court order with the registrar of companies. Capital A expects to do so by late January 2026. Once effective, the company's shareholders' funds will turn positive, which is the main criterion for the lifting of the PN17 status, although the final uplift remains subject to regulatory approval.

This development follows the January 16 completion of the disposal of the group's aviation assets - AirAsia and the AirAsia Aviation Group - to sister company AirAsia X. That transaction involved AirAsia X issuing shares to Capital A shareholders and assuming MYR3.8 billion (USD937.2 million) in debt.

"This order is the final court step in our PN17 journey," group chief financial officer Teh Mun Hui said. "We set out to fix the fundamentals, and we followed through on every step - completing the aviation business disposal, distributing AirAsia X shares to our shareholders, and securing the approvals needed to clean up the balance sheet."

Following the restructuring, Capital A will function as a holding company for non-aviation businesses, including maintenance provider Asia Digital Engineering, logistics arm Teleport, and the AirAsia MOVE digital platform.