1. Introduction
We refer to the announcement dated 11 May 2015 in relation to the execution of the New Catering Agreements (“NCAs”) between Brahim’s Airline Catering Sdn Bhd (“BAC”), an indirect 70%-owned subsidiary of BHB, and Malaysia Airlines Berhad (“MAB”).
By an Extension Agreement dated 1 September 2015 entered into between BAC and MAB the New Terms Commencement Date for the NCAs was extended to 15 September 2015.
The Company wishes to announce that following the execution of the NCAs, Brahim’s Airline Catering Holdings Sdn Bhd (“BACH”), a wholly-owned subsidiary of BHB and the holding company of BAC, had on 14 September 2015 entered into the following agreements:
(a) Termination agreement for the termination of the existing shareholders agreement (“ESA”) between Malaysian Airline System Berhad (“MAS”), BACH and BAC (“TESA”); and
(b) Shareholders agreement between BAC, BACH and MAB (“SHA”) which regulates the relationship between BACH and MAB as shareholders of BAC.
The TESA and SHA are collectively referred to as the “BACH Ancillary Agreements”.
In addition to the BACH Ancillary Agreements, BAC has also on 14 September 2015 entered into the following agreements:
(a) Termination agreement for the termination of the existing catering agreement between BAC and with MAS (“TECA”);
(b) Termination agreement for the termination of the existing tenancy agreement (“ETA”) between BAC and MAS (“TETA”) for the use of the premises provided by MAS to BAC for BAC’s kitchen and other facilities (‘Premises”); and
(c) Tenancy Agreement (“TA”) between BAC and MAB for the provision of the Premises for BAC‘s kitchen and other facilities.
The TECA, TETA and TA are collectively referred to as the “BAC Ancillary Agreements”
With the execution of the BACH Ancillary Agreements and BAC Ancillary Agreements BAC and MAB have agreed that the New Terms Commencement Date for the NCAs is 15 September 2015.
2. Rationale
The execution of the TESA, TECA and TETA and SHA are incidental to the NCAs whereby the airline business previously undertaken by MAS is now being taken over by MAB in view of the MAS Restructuring Plan pursuant to the Malaysian Airline System (Administration) Act 2015 (“Act”).
The TA is entered into following the transfer of the assets of MAS including the Premises to MAB pursuant to the Act.
The SHA has similar terms as the ESA, which inter alia provides for agreement between the parties on composition of the Board of Directors, reserved matters which require the approval of both parties, deadlock provisions and pre-emption clauses. The TA is principally on the same terms as the ETA.
3. Effect of the BACH Ancillary Agreements and BAC Ancillary Agreements
The execution of the BACH Ancillary Agreements and BAC Ancillary Agreements does not have any effect to the share capital, substantial shareholders’ shareholdings, earnings per share, net assets and gearing level of the Company.
4. Directors’ Statement
The Board of Directors of BHB, having considered the rationale and the terms of the BACH Ancillary Agreements and BAC Ancillary Agreements, is of the opinion that the execution of the BACH Ancillary Agreements and BAC Ancillary Agreements are in the best interest of the Company.
This announcement is dated 17 September 2015.