Type	Announcement
Subject	AIRASIA BERHAD ("AIRASIA" OR "COMPANY") Information Technology (IT) Shared Services Amendment Agreement with Tune Money Sdn Bhd
Contents	PLEASE REFER TO THE ANNOUNCEMENT DETAILS BELOW.

 

1. Introduction

Further to AirAsia’s announcement made on 16^th March 2009, AirAsia is pleased to announce that the IT Shared Services Agreement entered into with Tune Money Sdn Bhd (“TMSB”) dated 16^th March 2009 (the “Agreement”) has now been amended with regard to Fee chargeable by AirAsia to TMSB. AirAsia and TMSB have executed an Amendment Agreement on 10^th June, 2009  to reflect such amendment (“Amendment Agreement”).

2. Details of  TMSB

TMSB was incorporated on 30^th December, 2005 and is principally engaged in business as providers, advisers and consultants on financial services and other related services.

TMSB is 44.83% owned by Tune Ventures Sdn Bhd in which both Dato’ Sri Anthony Francis Fernandes and Dato’ Kamarudin Bin Meranun are substantial shareholders. 

3. Salient terms of the Amendment Agreement

Under the terms of the Agreement, the Company has agreed to provide TMSB a range of information technology services (“Services”) on sharing basis including but not limited to resources, expertise and facilities in exchange for a payment of a Fee. 

Through the Amendment Agreement, the relevant Fee is amended to reflect 25% of the total salary of a subset of AirAsia’s Information Technology department staff supporting Tune Money as opposed to the total monthly payroll costs of AirAsia’s Information Technology department reflected in the Agreement. The Fee payable by TMSB to the Company will be RM122,496 per month.

Subset means the entire Information Technology Department of AirAsia except Interactive Marketing, New Media and CRM Departments.

 

4. Rationale for entering into the Amendment Agreement

The rationale for entering into the Amendment Agreement is as follows:  

(a)        In April 2009, Interactive Marketing, New Media and CRM Departments became a part of the AirAsia Information Technology department in an effort to centralise all areas related to technology to provide better synergy, deliverables and systems.

(b)        Consequently, the total headcount and salary in Information Technology department has increased substantially but at the same time not the entire Information Technology department is providing services to TMSB under the Agreement.

5. Financial Risks

The downside financial risks associated with the provision of Services under the Agreement are expected to be very limited because the Company will not be investing in any specialised or expensive equipment. There will only be a marginal increase in the manpower required to perform the Agreement. In the event the Agreement is terminated for whatever reason and at any point in time, these additional resources can be readily absorbed by the Company’s ever expanding operations.

Only under restricted circumstances of non-compliance by AirAsia that AirAsia will be made liable to a maximum sum of the preceding 12 months’ total payroll costs payable by TMSB as required by Bank Negara Malaysia.

6. Directors’ and major shareholders’ interests

Dato’ Sri Anthony Francis Fernandes and Dato’ Kamarudin bin Meranun are directors and major shareholders of the Company. Hence, they are deemed interested in the Amendment Agreement. They have abstained from all Board and management deliberations in respect of the Amendment Agreement.

The interested directors’ and interested major shareholders’ direct and indirect shareholdings in AirAsia as at 10^th June 2009 are as set out in the table below.

 

	Direct		Indirect
	No. of Shares	%	No. of Shares	%
Dato’ Sri Anthony Francis Fernandes	2,627,010	0.11	729,458,382	30.72
Dato’ Kamarudin bin Meranun	1,692,900	0.07	729,458,382	30.72

Note:

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

Save as disclosed no other directors and/or major shareholders of AirAsia and/or persons connected with them have any interest, whether directly or indirectly, in the Amendment Agreement.

7. Directors’ opinion

Save for the above interested directors (who had abstained from all deliberations), the Board  having considered all aspects of the Amendment Agreement is of the opinion that it is done on an arm’s length basis and in the best interest of the Company.

 

8. Financial effect of the Amendment Agreement

As previously announced on 16^th March 2009, this Amendment 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 31^st December 2009.

 

 

9. Approval required

AirAsia does not require the approval of its shareholders or any regulatory authorities to enter into the Amendment Agreement.

 

 

10. Document available for inspection

The Amendment 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.

 

This announcement is dated 10^th June, 2009.

 

 

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