Tony Fernandes has just stepped down as AirAsia X (AAX) Group CEO.

Hold up! AAX is the budget airline for medium and long-haul flights. It's the sister company of AirAsia and is under the holding company Capital A Group. He's not stepping down from Capital A!

‍

⏳ Timelines, timelines

Tony Fernandes took on the role four months ago after Nadda Buranasiri, previous AAX CEO, resigned.

• Fernandes used to be an independent non-executive director at AAX.

AirAsia X slipped into PN17 status in October last year.

‍

🚨 Distress...

Companies listed on Malaysia's stock exchange (Bursa Malaysia) are categorized under PN17 as companies under financial distress if they meet at least one of six criteria.

• AAX's external auditors, Ernst & Young, expressed a disclaimer of opinion on their audited financial statements for the 18-month financial period ended June 30, 2021.

‍

😱 What happens next?

If a company is under PN17 status, they must make changes to comply with Bursa Malaysia's requirements. If not, the company's stock will be suspended from trading and/or get delisted from the market — or both. (Major yikes.)

• Last year, AAX announced they had 12 months to regularize their financials and that it was starting a proposed debt and corporate structuring and proposed fundraising.

Officially, it says Fernandes' resignation from AAX was due to "other commitments." But we hear it's to focus on Capital A Group and the parent company and also focus on lifting AAX out of PN17 status.