Company holding state capital (5)
I believe the answer is:
cairo
'capital' is the definition.
(Cairo is an example)
'company holding state' is the wordplay.
'company' becomes 'co' (abbreviation).
'holding' is an insertion indicator.
'state' becomes 'air' (air is a kind of state**).
'co' placed around 'air' is 'CAIRO'.
(Other definitions for cairo that I've seen before include "Al Qahira" , "City near the Nile delta" , "Egyptian capital" , "Egypt's capital" , "African city" .)