We refer to the article published in StarBiz today, 23 October 2020, regarding the Company securing a loan from Sabah Development Bank Berhad (“SDB”). The Board of Directors of the Company hereby confirms that a RM300 million loan from SDB has been approved and disbursed to AirAsia group of companies, as part of the fund raising exercise undertaken by the Company.

The purpose of the loan is to fund specific development projects as agreed by both parties as listed below:

• RM170 million to establish and operate OURFARM digital food supply chain and cold chain facilities in Sabah;
• RM110 million to part-finance the project to turn Kota Kinabalu International Airport into an international hub for AirAsia Berhad's operations;
• RM10 million to enhance e-commerce platforms and marketability of Sabah products; and
• RM10 million to further promote Sabah tourism destinations on airasia.com, the digital super app of AirAsia.

This loan is in line with AirAsia’s pivot into the digital business. The main purpose of the loan is to enhance logistics in Sabah by increasing its supply chain and connectivity, creating over 100,000 new jobs in the process.

The Company wishes to clarify that this loan is not backed by a government guarantee.

This announcement is dated 23 October 2020.