Capital A Berhad (KLSE:CAPITALA) has entered into a letter of intent with Aetherium Acquisition Corp. (NasdaqGM:GMFI), a special purpose acquisition corporation (SPAC) listed on the Nasdaq in the United States. The letter of intent outlines a proposed business combination between GMFI and Capital A International (CAPI), a special purpose corporation to be formed by Capital A. This combination will involve GMFI acquiring all the issued and outstanding share capital of CAPI, resulting in CAPI becoming a new publicly listed company on the Nasdaq.

Capital A's decision to enter into this agreement is part of its plan to regularise its financial condition after triggering the criteria under Practice Note 17 (PN17) of the Main Market Listing Requirements of Bursa Malaysia Securities Bhd. The proposed business combination is expected to enable Capital A to unlock the value of the AirAsia brand and improve its shareholders' equity. CAPI's intended principal business is to be an ASEAN-based investment and strategic development firm leveraging the AirAsia trade name and brand image.

The proposed business combination is contingent on the signing of a definitive agreement and the satisfaction of various conditions, including approvals from regulatory authorities and shareholders. Upon completion, the group will have exposure to the US capital markets through the Nasdaq. The agreement outlines key terms and conditions, including the indicative equity value of USD 1 billion for CAPI.

The parties aim to complete the proposed business combination within three months from the execution of the letter of intent. However, the completion of the proposal carries non-completion risks and potential loss of income for Capital A, as it would lose royalty income from the AirAsia brand. The letter of intent is non-binding, and the agreement can be terminated under certain circumstances.