Capital A, headed by Fernandes, will retain the digital, logistics and aviation services businesses, while AirAsia X will be renamed AirAsia Aviation and be led by long-time executive Bo Lingam under the plan.
Capital A hopes submit to Bursa Malaysia Securities for approval in February.
AirAsia X is also classified as PN17, but in an interview with Reuters on Tuesday, Fernandes said under the restructuring plan, both listed companies would emerge from that status by July 2023.
Capital A investors will receive an in-specie distribution in the former AirAsia X, giving them exposure to a pure airline business with multiple brands.
Fernandes said the distressed-company status had a "major impact" on the airline's share price by reducing investor confidence, which he hoped to restore through the restructuring plan.