In a note, the investment bank has upgraded its call for Capital A to an “outperform” with a target price of RM1.57 after the company announced its proposed plan to regularise its financial position.

The plan includes a capital reduction of up to RM6 billion to set off against the multinational low-cost airline group’s accumulated losses.

“This aims to facilitate Capital A’s exit from its Practice Note 17 (PN17) status and enable future growth and strategic expansion, following the disposal of its aviation business to AirAsia X (AAX).

“We are positive with the restructuring plan as it outlines a clear pathway to turn around its operations,” it said.

At 11.19am, its share price fell by 1.5 sen to 97.5 sen per share with 22.56 million shares traded.