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12. Investment in subsidiaries (cont’d.)
Deemed acquisition of subsidiaries (cont’d.)
Details of the assets, liabilities and net cash outflow arising from the acquisition of additional interest in IAA and PAA are as follows:
(cont’d.)
PAA (cont’d.)
Group
RM’000
Cost of acquisition
–*
Less: Cash and cash equivalents of subsidiary acquired
(30,166)
Net cash inflow on deemed acquisition of subsidiary
(30,166)
* The cost of acquisition is nil as this is a deemed acquisition of a subsidiary.
From the date of acquisition, PAA has contributed net profit of RM33,488,000 to the Group’s profit net of tax.
Acquisition of non-controlling interest in PAAI by a subsidiary, PAA
On 19 December 2017, PAA entered into an agreement to purchase 87,250,000 shares of PHP1.00 each in PAAI, a subsidiary of
PAA representing 49.8% equity interest in PAAI for a total cash consideration of PHP26.5 million (equivalent to RM2.1 million).
Pursuant to this acquisition, the Group’s effective interest in PAAI has increased from 19.6% to 39.5% and the financial effects of this
transaction amounting to RM285.7 million is debited to retained earnings as disclosed in the consolidated statement of changes in
equity.
Reverse acquisition of AAID by IAA
On 29 August 2017, the Company executed Conditional Sale of Perpetual Capital Securities agreements with PT Fersindo
Nusaperkasa (“FNP”) and AAIL respectively. Perpetual Capital Securities (“PERPS”) with a nominal value of IDR1,326,510,000,000
(equivalent to RM426.1 million) and IDR1,274,490,000,000 (equivalent to RM409.4 million) were sold to FNP and AAIL accordingly.
Subsequently, PT AirAsia Indonesia TBK (formerly known as PT Rimau Multi Putra Pratama TBK) (“AAID”), a company listed on
the Indonesia Stock Exchange conducted a rights issue of up to 13,646,388,139 new rights shares at a nominal value of IDR250.
Pursuant to this rights issue, FNPandAAILhad subscribed to 5,306,040,000 and 5,097,960,000AAID shares respectively and these
subscriptions were settled in-kind by the transfer of the full amount of PERPS owned by FNP and AAIL to AAID. Upon completion
of the rights issue, AAID had converted IDR241,066,000,000 PERPS into 241,066 new common shares of IDR1,000,000 each in IAA,
which is equivalent to 57.25% of the share capital of IAA.
On 29 December 2017, AAID had completed the acquisition of shares in IAA. This is treated as a reverse acquisition for accounting
purposes as IAA became the controlling shareholder of AAID. Accordingly, IAA (being the legal subsidiary) is regarded as the
accounting acquirer and AAID (being the legal parent) is regarded as the accounting acquiree. IAA is deemed to have issued equity
shares as purchase consideration for the assets and liabilities of AAID as AAID’s operation did not constitute a business at the time
of completion of the reverse acquisition.
The acquisition costs (listing expenses) arising from the reverse acquisition was determined using the fair value of the issued equity
of AAID before the acquisition which is RM15.4 million which represents the market value of AAID based on the quoted and trade
price of the shares as at 29 December 2017. The net assets of AAID was RM6.2 million. The difference between the purchase
consideration and identifiable net assets of AAID amounting to RM9.2 million has been recognised as acquisition costs incurred by
IAA.
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
[ ]
AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS
292