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| OUTCOME OF 16th ANNUAL GENERAL MEETING, 24 May 2012 |
All resolutions set out in the Notice of AGM dated 2 May 2012 were duly passed by shareholders at the 16th AGM of the Company (Transmile) held on Thursday 24 May 2012.
REVIEW OF TRANSMILE'S MILESTONES OVER LAST FIVE YEARS
Shareholders were given a review of the efforts by the current Management over the last five (5) years to resolve the outstanding debt and operational issues despite the unrelenting legal challenges from certain lenders.
The following major milestones in each of the following specific areas culminating in the Court's sanctioning of the Scheme of Arrangement (SOA) on 20 February 2012 were elaborated on and duly noted by shareholders:-
Debt Restructuring & Related Legal Challenges
• Bursa Malaysia’s classification of Transmile as a PN1 and PN17 company and Transmile’s appeals to maintain its listing status and subsequent delisting in May 2011;
• Negotiations and preparation of a Common Terms Agreement which was subsequently found not workable due to business and regulatory issues and substituted with an alternative proposal but was not acceptable to lenders;
• Meeting with the Corporate Debt Restructuring Committee (CDRC) of Bank Negara Malaysia to explore CDRC's assistance in the debt restructuring;
• Winding-up petition and civil suit for breach of Trust Deed by certain lenders;
• Approval of Scheme of Arrangement (SOA) of Transmile and its subsidiary, Transmile Air Services Sdn Bhd (TAS) , by a majority of scheme lenders at the respective Court Convened Meetings held in April 2011;
• Invitations to potential investors to submit proposal for acquisition of TAS in accordance with the SOA;
Legal Action Against Former Management
• Transmile’s internal investigation on financial irregularities and independent review by PriceWaterhouseCoopers;
• Civil suit by Transmile against its former management;
Operational Matters
• Preparation and sale of entire fleet of four (4) MD-11 aircraft in March 2011;
• Termination and expiry of business contracts and development of new routes and customers;
• Re-location of Subang air cargo operations to KLIA required by the Ministry of Transport and application for an extension of time and efforts to secure a new site at KLIA;
• Proposed disposal of Maintenance Repair and Overhaul (MRO) facility and tie-up with other major airline and cargo operator;
OPTIONS AND IMPLICATIONS OF SOA
The Chairman explained to shareholders that TAS has to repay the monies it had borrowed from lenders. The easiest solution would be to wind-up Transmile which would be drastic and to the detriment of all stakeholders as compared to the SOA which provides for:-
• TAS to be disposed of as a going concern to a potential investor and all proceeds together with the MD-11 sales proceeds would be transferred to the lenders;
• However, in the event the proposed TAS disposal cannot be achieved within nine (9) months from 20 February 2012 or such extended period, TAS would be placed under voluntary liquidation.
Shareholders were further advised that whether an investor is found for TAS or it is liquidated, the overall effect is that shareholders would lose all their investment as the loans far exceed the value of the Group’s assets. In view of the legal challenges which had unduly delayed sanctioning of the SOA, the Company may also be forced to opt for liquidation if it cannot find an investor soon for TAS due to depleting cash for the Company’s operations.
SHAREHOLDERS' RESPONSE
The shareholders present unanimously expressed:-
• their support for the current Board of Directors comprising a majority of senior management staff to implement the SOA as sanctioned by the High Court and to take whatever steps necessary to ensure Transmile’s viability and continued existence in the best interest of all stakeholders;
• that they are not blaming the current Board for the losses they have incurred and the parties responsible for the financial irregularities should be quickly brought to justice;
• that the current Board and Management including pilots, engineers and other staff and employees who have stayed in their jobs despite the difficult conditions are to be commended for their commitment and loyalty in keeping the Company going;
RE-ELECTION OF DIRECTORS
All four (4) Directors retiring at the 16th AGM comprising Encik Mohd Lutfi bin Mat Lazim, Mr Krishnasamy A/L Rengasamy, Ms Kam Wai Peng and Mr Tan Teong Boon were unanimously re-elected and the composition of the Board of Directors is as follows:-
Board of Directors as at 24 May 2012
1. Mr Liu Tai Shin (Chairman/Managing Director)
2. Encik Mohd Lutfi bin Mat Lazim (Nominee Director of Pos Malaysia Berhad)
3. Mr Krishnasamy A/L Rengasamy (General Manager, Flight Operations)
4. Ms Kam Wai Peng (Chief Financial Officer)
5. Mr Tan Teong Boon. (Head, Corporate Affairs)
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