The Board of Directors of  Avillion Berhad (“Avillion” or “the Company”) wishes to announce that Avillion Hotels International Sdn Bhd (“AHI”) had on 30 April 2019 entered into an Hotel Management Agreement (HMA) with R&R Sky Group Sdn Bhd (“R&R Sky”) in which AHI is to be given a fixed 10 years lease to operate and manage a new hotel.  AHI will operate and provide direct day-to-day management and operations of the hotel once it opens.

INFORMATION ON THE PARTIES TO THE HMA

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, Level 8, Wisma YPR, No. 1, Lorong Kapar Off Jalan Syed Putra, 58000 Kuala Lumpur.

The principal activity of AHI is engagement in hotels operation and it has vast experience and expertise in the various phases of hotel development, operation and management.

R&R Sky Group Sdn Bhd  (“R&R Sky”)

R&R Sky Group Sdn Bhd (Company No.: 1055975-A) is a private company incorporated in Malaysia and having its registered office at 110B-1, Jalan Permaisuri Bainun, 30250 Ipoh, Perak.

The principal activities of R&R Sky are hotel management and investment.

SALIENT INFORMATION ON THE HMA

1) Information of the Hotel

The hotel is located at PT1130, Jalan Pasir Bogak, 32300 Pulau Pangkor, Perak. The hotel consists of four (4) storey and equipped with sixty-five (65) rooms. 

2) Operating Period

The term of the HMA shall commence immediately and the operating period shall commence after the Hotel has received all the required business licences to operate (“Handover Date”) and expires at the end of tenth (10th) Full Operating Year following the Handover Date. The hotel is scheduled to operate in the 2nd half of 2019 after obtaining all the required licence.

3) Option to Renew Operating Period

R&R Sky, on a written notice to AHI at least twelve (12) months before the expiration of the Operating Period and if there shall not be at the time of such request any existing breach or non-observance of any of the covenants on the part of AHI, grant to AHI a further term of five (5) years from the expiration of the Operating Period or such other duration as agreed by R&R Sky ("Extended Operating Period"), for AHI to render its services in connection with the operation of the Hotel upon the terms and conditions to be mutually agreed upon by the parties at the time of extension, including the management fees for the Extended Operating Period.

4) Termination

The HMA can be terminated by either R&R Sky or AHI or by mutual consent. 

RATIONALE OF HMA

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

FINANCIAL EFFECTS OF THE HMA

The HMA 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 2020.

However, the Appointment by R&R Sky is expected to contribute positively to the future earnings of Avillion Group, particularly during the operating period and the extended period, if granted.

APPROVALS REQUIRED FOR THE HMA

The HMA 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 HMA.

STATEMENT BY DIRECTORS

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

DOCUMENTS MADE AVAILABLE FOR INSPECTION

A copy of the HMA is available for inspection at the registered office of the Company at Unit 8E, Level 8, Wisma YPR, No. 1, Lorong Kapar Off Jalan Syed Putra, 58000 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 30 April 2019.