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Tuesday, March 5, 2024

Capital A International, Behind the Iconic AirAsia, Set for U.S. Public Listing via Merger with Aetherium Acquisition Corp

Proposed transaction represents an enterprise value on a pro-forma basis of US$1.15 billion

Capital A Berhad (“Capital A”), (Kuala Lumpur Stock Exchange: 5099.KL), announced it has finalized a business combination agreement with Aetherium Acquisition Corp (Nasdaq: GMFI), a Special Purpose Acquisition Company (“SPAC”), to list Capital A International (“CAPI”) in the

U.S. public markets. CAPI leverages the expansion, management and licensing of the AirAsia brand, and serves as a dynamic global marketing catalyst for Asean brands. The transaction also offers investors a gateway to participate in a fast-growing economic hub, on track to become the world’s fourth largest economy by 2030.

CAPI will be led by Tony Fernandes, one of Asia's most recognizable entrepreneurs - best known for acquiring AirAsia in 2001 and transforming it into a global airline, which democratized air travel in the region. He has led the airline's remarkable growth from just two planes to its current fleet of 242 aircraft, making it Asia's largest low-cost carrier and among the top three strongest airline brands in the world. Operating across Asean with hubs in Malaysia, Thailand, Indonesia, the Philippines and soon Cambodia, AirAsia flies 278 routes to 131 global destinations, having flown over 776 million passengers since its inception.

Tony Fernandes, Chief Executive Officer of Capital A said, “Over more than two decades, AirAsia has become a prestigious brand synonymous with value, innovation and inclusivity.

AirAsia has transformed from a small Malaysian airline into a leading global aviation and travel brand valued at over $1 billion*, and enabled Capital A to build a diversified portfolio spanning aviation, aviation services, logistics, and digital companies in fintech, travel and hospitality. The evolution of the AirAsia brand has created a loyal global consumer base, positioning us favorably to expand our brand internationally through CAPI. This listing grants us access to the world's most extensive and liquid capital markets, enhancing the company's international credibility and presence while creating value for our shareholders."

In addition to the AirAsia brand, CAPI holds the intellectual property rights for 14 other renowned brands and over 224 trademarks spanning 23 countries. CAPI's platform integrates brand strategy, creative marketing and intellectual property development to strategically position its brands and cultivate cultural significance among consumers. The company intends to leverage the brand value of AirAsia through further licensing while implementing its successful strategy to propel and expedite the growth of its intellectual property portfolio.

Mr. Fernandes remarked, "We are the first Asean-based brand in the travel sector to adopt this strategy and expand through licensing, leveraging our strong ties to the Asean region.

Additionally, our growth strategy involves acquiring and developing more brands from this dynamic region. We are optimistic about the potential for our brand business to expand well beyond our origins, particularly in markets where intellectual property and brand value are highly esteemed by consumers and investors.

“The Asean region offers a thriving economic landscape with a 680 million population, surpassing the U.S. and closely trailing the European Union. Fueled by a growing middle-income population that is creating new consumer markets and economic opportunities, the region is poised for sustained growth. Moreover, the recent surge in popularity of Asia-based media, entertainment, and lifestyle brands underscores the escalating global demand for brands originating in Asia."

Jonathan Chan, Chairman and CEO of Aetherium said, “We’re thrilled to partner with Tony and the CAPI team to capitalize on their proven track record and extend the brand beyond the world’s fastest-growing consumer-driven market, boasting a population twice the size of the United States. Under Tony’s exceptional leadership, AirAsia has evolved into an immensely successful and widely recognized brand in the region. With over 22 years of innovation in air travel and digital services, the company is strategically positioned to strengthen its leadership in Asean and pursue growth in international markets. This collaboration presents a distinctive opportunity for U.S. capital market investors to participate in the rapid expansion of Asean economies through a company that embodies the region's diverse culture, energy, and emerging opportunities.”

Investment Highlights

  • Owner and licensor of the renowned AirAsia brand, with an iconic presence in airline, travel, and lifestyle, CAPI taps into the growth resurgence of Asia’s largest low-cost carrier and supported by a robust order book.

  • Operating an asset-light business model, the business generates strong operating margins with minimal inventory and working capital requirements, fortified by stable and recurring revenue stream from royalty fees, driving free cash flow.

  • The company benefits from access to Capital A's ecosystem, boasting over 50 million users, 22 million loyalty members, and over 56 million social media followers, expanding brand reach and enhancing CAPI’s brand-building capabilities.

  • Based in Asean, one of the world's fastest-growing economies poised to become the fourth-largest by 2030, the company has a substantial addressable licensing global market of $341 billion, with the Asean market accounting for $5 billion, growing at an impressive 13% annually, outpacing the global average.

  • Abundant opportunities exist to develop the brand platform:

    • Extend the AirAsia brand beyond the travel sector by expanding into new industries, categories and geographies through in-house ventures or joint ventures;

    • Develop new brands that capitalize on the strength of the Asean markets;

    • Creating character intellectual property and enhance value through partnerships and merchandising; and

    • Acquire and grow other Asean-based brands

  • The company is guided by an experienced management team with a successful track record in brand management.

Editor’s Note: Asean (Association of Southeast Asian Nations) is a political and economic union comprised of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

Key Transaction Terms

Under the terms of the proposed transaction, CAPI will combine with Aetherium and become a publicly traded entity. The transaction reflects an estimated pro forma enterprise value for CAPI of $1.15 billion. Although the Boards of both CAPI and Aetherium have unanimously approved the transaction, the transaction remains subject to the approval of Aetherium stockholders and other customary closing conditions. Additional information about the transaction, including a copy of the Business Combination Agreement will be available in a current report filed by Aetherium on Form 8-K with the U.S. Securities and Exchange Commission (“SEC”), which may be found at www.sec.gov.

Advisors

Greenberg Traurig, LLP serves as U.S. legal counsel and Foong & Partners serves as Malaysian legal counsel to CAPI. Rimon P.C. is servicing as United States legal counsel to Aetherium.

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