In a filing with Bursa Malaysia, the budget carrier said it had entered into a share sale agreement with Yeo to purchase 881,873 ordinary shares of 1 ringgit in T&Co, or 80 per cent of the share capital of the company.

AirAsia said the purchase consideration shall be satisfied in part by cash of 814,000 ringgit and in part by AirAsia credit shell of 100,000 ringgit which may be used to pay for flights on all carriers within the AirAsia group.

The carrier has also entered into a shareholders agreement with Yeo, Douglas Cheng Heng Lee and T&Co to govern the foregoing parties’ relationship as the shareholders of T&Co.

T&Co has been supplying inflight coffee and tea solutions to AirAsia since December 2013.

“The purchase price of 914,000 ringgit is based on the agreed valuation of 1.14 million ringgit.

“This was derived after taking into consideration T&Co’s net tangible assets of 280,586 ringgit as of June 2015 and the capitalisation of the amount owing to Cheng of 852,341 ringgit.

“Upon capitalisation, the total shares of T&Co shall be increased to 1.102 million bringing up the NTA per share to 1.03 ringgit,” AirAsia said.

The carrier said the T&Co board would have three directors comprising of two directors nominated by Airasia and one by Yeo, which could be Yeo or any director nominated by her.

AirAsia rationalised that acquiring a majority stake in T&Co would allow the carrier greater management control of T&Co.

It said the acquisition would also allowed Airasia to be more focused on product development and that coffee and tea were an important part of the inflight experience.

“A good coffee and tea offering would help AirAsia differentiate its brand in an increasingly competitive market.

“It would also allow AAB to raise premiums on beverages as well as improve the margin,” it said.