The Company has the following agreements with the Government of Malaysia (“GoM”) for the development and operations of KL International Airport (“KLIA”): -
- Operating Agreement (“OA”) between GoM, MAHB and Malaysia Airports (Sepang) Sdn Bhd (“MA Sepang”) dated 12 February 2009 which took effect for a period of 25 years until 11 February 2034; and
- Lease Agreement (“LA”) between Federal Lands Commissioner (“FLC”) and MA Sepang dated 12 February 2009 which took effect for a period of 25 years until 11 February 2034.
In line with the national objective to catalyse economic development via KLIA, consistent with other airports in developed countries, the Company established a wholly owned subsidiary, KLIA Aeropolis Sdn Bhd (“KASB”) to focus on attracting and developing economic activities within the vicinity of KLIA. Based on engagements with various potential investors and businesses, the Company acknowledged the challenges faced by these investors and businesses in obtaining palatable return on investment due to the short remaining tenure of the land lease. Accordingly, the Company engaged the GoM to structure better terms to increase both domestic as well as foreign direct investments. After a series of stakeholders engagements, the GoM have approved the principle terms of the Land Lease Agreement (“LLA”) and Development Agreement (“DA”) on 22 December 2021, subject to the finalisation of the abovementioned agreements with the relevant Government agencies. Upon robust documentation process with the relevant Government agencies, the LLA, DA and Supplementary Agreements to realise the above objective were executed on 17 November 2022, as follows: -
1. Development Agreement and Land Lease Agreement
The DA between KASB and the GoM to formalise the acceptance of grant of development rights by KASB in respect of forty-one (41) lots of land measuring 8,537.3137 acres (equivalent to 3,454.9295 hectares) in total, situated in Mukim Lapangan Terbang Antarabangsa Sepang, Daerah Sepang, Negeri Selangor (“KLIA Aeropolis Lands”) for a period of ninety-nine (99) years commencing from 17 November 2022, subject to the terms and conditions of the DA, which, among others, give the right to KASB to plan, design, develop and construct the KLIA Aeropolis Lands.
Meanwhile, the LLA between KASB and FLC formalised KASB’s acceptance of a ninety-nine (99) year lease of the KLIA Aeropolis Lands commencing from 17 November 2022, subject to the terms and conditions of the LLA, which, among others, give the rights to KASB to occupy, use, control, manage and sublease the KLIA Aeropolis Lands.
2. Supplemental Agreements
The Supplemental Agreement between MA Sepang and the GoM is intended to vary the terms and conditions of the OA to carve out the KLIA Aeropolis Lands from the OA for the development of KLIA Aeropolis.
Meanwhile, the Supplemental Agreement between MA Sepang and FLC is intended to vary the terms and conditions of the LA to carve out the KLIA Aeropolis Lands from the LA for the development of KLIA Aeropolis.
Therefore, consequent to the above, MA Sepang will retain the remaining forty-seven (47) lots of land measuring approximately 23,111.04 acres (equivalent to 9,352.71 hectares) for the continued purposes of KLIA airport operations, to be held under the OA and LA.
The execution of the DA, LLA and Supplemental Agreements, as well as the development of KLIA Aeropolis are expected to contribute positively to the future earnings of MAHB Group. They are not expected to have any material effect on share capital, substantial shareholders’ shareholdings, net assets per share, earnings per share and gearing of the Company for the financial year ending 31 December 2022.
None of the directors of the Company or its major shareholders and/or persons connected to them has any interest, direct or indirect, in the DA, LLA, Supplemental Agreements and the KLIA Aeropolis development.
This announcement is dated 21 November 2022.
