Wednesday, July 29, 2009

AirAsia Aerhad

29 July 2009

AirAsia is pleased to announce that it has today entered into a Cooperation Agreement with Tune Talk Sdn Bhd (“TTSB”) (the Agreement”). The purpose of the Agreement is to generate extra revenue and further boost the AirAsia’s branding.

Details of TTSB TTSB was incorporated on 13 January, 2006 and is principally engaged in business as providers of telecommunication services and other related services. TTSB is 35.75% owned by Tune Ventures Sdn Bhd (“TVSB”) in which both Dato’ Sri Tony Fernandes (“DSTF”) and Dato’ Kamarudin Bin Meranun (“DKBM”) are substantial shareholders.

Salient terms of the Agreement Under the terms of the Agreement, the Company will:

(a) Become the Launch Partner of TTSB; (b) Purchase 200,000 units of TTSB SIM Cards worth RM860,000 (“Purchase Price”) that will bear AirAsia’s branding along with TTSB’s branding;

(c) Satisfy the Purchase Price by way of 5,059 e-gift Voucher in RM200 denomination less 15% discount;

(d) Be offered free of charge advertising in the various advertising platforms of TTSB in the value of the Purchase Price;

(e) Further, the Company will market TTSB’s Top Up Vouchers and will be remunerated with a 5% sale commission on total top-up sales;

(f) Any unsold TTSB SIM Cards will be disposed off in a manner to be mutually negotiated and agreed upon by Parties.

4. Rationale for entering into the Agreement The rationale for entering into the Agreement is as follows:

(a) To generate extra revenue through sales of TTSB SIM Cards and Top Up Voucher;

(b) To generate additional online ticket sales via distribution of e-gift voucher by TTSB through its loyalty programs;

(c) To enhance and further boost AirAsia’s branding through various advertising platforms made available by TTSB free of charge;

5. Financial Risks The downside financial risks associated with the Agreement are expected to be very limited because the Company does not need to make extra investment to market or sell the TTSB SIM card or Top Up Voucher, which will be sold on board all AirAsia’s flights by the Company’s existing manpower. In addition, the Company will be able to generate more online sales via the e-gift vouchers and additional revenue from selling TTSB’s SIM Card and Top Up Voucher.

6. Directors’ and major shareholders’ interests DSTF and DKBM are Interested Directors by virtue of their directorships in both the Company and TTSB respectively. DSTF and DKBM are also Interested Major Shareholders by virtue of their shareholdings in both TVSB (a major shareholder of TTSB) and Tune Air Sdn. Bhd. (a major shareholder of the Company). Save for the Directors and major shareholders as disclosed below (respectively known as “Interested Director(s)” and “Interested Major Shareholders”), none of the Directors and/or major shareholders of AirAsia and/or persons connected to them have any interest, direct or indirect, in the Agreement. The shareholdings of DSTF and DKBM in AirAsia as at 28 July, 2009 are as set out in the table below.
No. of Shares%No. of Shares%
DSTF2,627,0100.11(1) 729,458,382 30.71
DKBM1,692,9000.07(1)729,458,382 30.71

(1) deemed interested by virtue of Section 6A of the Companies Act, 1965 through a shareholding of more than 15% in Tune Air Sdn Bhd

Accordingly, the Interested Directors have abstained from all Board and management deliberations in respect of the Agreement and provision of the services.

7. Statement By The Board Of Directors
Save for the Interested Directors, the Board having considered all the relevant factors in respect of the Agreement is of the opinion that entering into the Agreement is in the best interest of the Company.
8. Financial effect of the Agreement

This Agreement will not create any material financial impact nor will it have any effect on the share capital and substantial shareholders’ shareholdings of AirAsia in the current financial year. It is also not expected to have a material effect on the consolidated net assets of AirAsia and the consolidated earnings of AirAsia for this financial year ending 31st December 2009.
9. Approval required
AirAsia does not require the approval of its shareholders or any authorities to enter into the Agreement.
10. Document available for inspection
The Agreement is available for inspection at the registered office of the Company at 25-5, Block H, Jalan PJU 1/37, Dataran Prima, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia during normal business days from Mondays to Fridays (except public holidays) for a period of 3 months from the date of this announcement.

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