KUALA LUMPUR: Cape EMS Bhd
(CEB) has clarified that the proposed collaboration between its wholly owned subsidiary, Cape Manufacturing (M) Sdn Bhd (CMM), and Aeronas Aerocraft Sdn Bhd was limited to a memorandum of understanding (MOU) for preliminary discussions and initial development works for a light aircraft assembly workshop.
In a statement, CEB said no final commercial agreement, binding implementation arrangement, definitive investment documentation or formal operational arrangement was executed between the parties.
“The MOU merely served as a framework document for the parties to conduct preliminary discussions and to carry out initial development works for an assembly workshop for light aircraft.
“CMM and AeroNas did not enter into a final commercial agreement or a binding comprehensive implementation arrangement,” it said.
CEB said the proposed collaboration was exploratory and conditional, subject to the establishment of a light aircraft assembly plant, regulatory approvals, and compliance with commercial, technical, operational, financial and corporate governance requirements.
Following internal due diligence and risk assessment, CEB said issues relating to corporate governance, compliance, financial and commercial viability led CMM to terminate the MOU.
The company also addressed legal claims brought by Aeronas Aerocraft Sdn Bhd involving alleged RM10.017mil in special damages, RM40mil in proposed financial assistance for a production assembly plant capable of assembling 30 aircraft annually, and RM229.5mil in alleged loss of revenue linked to the proposed sale of 30 aircraft.
CEB said it has instructed its solicitors to apply to the High Court for AeroNas to provide further particulars of its claims and, if necessary, seek to strike them out.
The company said it does not expect the legal proceedings to have any material financial or operational impact on the group, adding that the AeroNas collaboration was not a core component of its “CEB 2.0” transformation roadmap or a significant contributor to performance.
CEB chief executive officer Christina Tee said: “CEB remains committed to disciplined execution, sound corporate governance and responsible decision-making principles.”
