INTRODUCTION

The Board of Directors of  Avillion Berhad (“Avillion” or “the Company”) wishes to announce that Avillion Hotels International Sdn Bhd (AHI), a wholly-owned subsidiary of Avillion Hotel Group Sdn Bhd (AHG) has on 10 April 2018 signed a Memorandum of Understanding (MOU) with Bintang Kencana Sdn Bhd (Bintang Kencana), a company intending to build a 153-room hotel in Bandar Baru Uda, Johor Bahru.

AHI will be given a fixed 10 years lease to operate and manage the new hotel. It will be consulting Bintang Kencana to ensure Construction Guidelines in respect of Hotel Space Configuration, Hotel Requirements and Design and Construction Materials used are met.  Avillion will then operate and provide direct day-to-day management and operations of the hotel once it opens.

INFORMATION ON THE PARTIES TO THE MOU

Avillion Hotels International Sdn Bhd (AHI)

Avillion Hotels International Sdn Bhd (Company No. 302949-V) is a private company incorporated in Malaysia and having its registered office at Unit 8E, Wisma YPR, 1 Lorong Kapar, Off Jalan Syed Putra, 58000 Kuala Lumpur.

The principal activities of AVI is engaged in the ownership and operation of hotels and have the required expertise in the various phases of hotel development and operation.

Bintang Kencana Sdn Bhd (Bintang Kencana)

Bintang Kencana Sdn.Bhd. (Company No: 183733-U) is  a private company incorporated in Malaysia and having its registered office, 39-1, Jalan Putra Permai 1A, Taman Putra Permai, Taman Equine, 43300 Seri Kembangan, Selangor.

The principal activities of Bintang Kencana is as developer.

SALIENT INFORMATION ON THE MOU

1) Bintang Kencana intends to appoint AVI to operate and provide direct the day-to-day management and operation of the Hotel (“the Appointment”)

2) Bintang Kencana and AVI  (“the Parties”) agree that pending negotiations of a comprehensive Hotel Management Agreement (the Principal terms is subject to further discussion and mutual agreement), the terms and conditions contained in the MOU  shall govern the relationship between the Parties.

3) Bintang Kencana agrees that it will not enter into similar negotiations for the provision of hotel management services in respect of the Hotel with any third party for a period of 90 days commencing the date of this Memorandum (“Exclusivity Period”).

4)Following the expiry of the Exclusivity Period, all binding obligations of the Parties pursuant to the MOU shall automatically terminate and neither party shall be liable to the other, save for breaches that occur prior to expiry of the Exclusivity Period.

RATIONALE OF THE MOU

The MOU is in line with Avillion Group’s strategy to grow the chain of Avillion-managed hotels.

FINANCIAL EFFECTS OF THE MOU

The MOU is not expected to have any material effect on the share capital, net assets, gearing and substantial shareholders’ shareholdings of Avillion for the current financial year ending 31 March 2019.

However, the Appointment by Bintang Kencana is expected to contribute positively to the future earnings of Avillion Group, barring any unforeseen circumstance.

 APPROVALS REQUIRED FOR THE MOU

The MOU is not subject to the approval of the shareholders of the Company or any regulatory authorities.

 DIRECTORS AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS

To the best of the Board’s knowledge and belief, none of the Directors and/or substantial shareholders and/or person connected to them has any direct or indirect interest in the said MOU.

 STATEMENT BY DIRECTORS

The Board is of the opinion that the MOU is in the best interest of the Company.

DOCUMENTS MADE AVAILABLE FOR  INSPECTION

A copy of the MOU is available for inspection at the registered office of the Company at Level 2, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur during office hours 8.30 a.m. to 5.30 p.m.  from Mondays to Fridays (except public holidays) for a period of 3 months from the date of this announcement.

 
This announcement is dated 10 April 2018.