Scicom entered into a 50:50 joint venture with AirAsia by the formation of a new entity called Asian Contact Centres Sdn Bhd. Will this be turning point for Scicom to become one of the largest call center operator in Asia? I'm looking forward to it!
AirAsia partners Scicom
AIRASIA Bhd (5099) has tied up with outsource contact centre operator Scicom (MSC) Bhd to service passengers worldwide.
The collaboration streamlines and fully integrates AirAsia's customer service and contact centre operations.
The two companies have equal partnership in the joint-venture company, Asian Contact Centres Sdn Bhd, located in Kuala Lumpur.
Asian Contact Centres, which began operation on February 16, serves AirAsia's customers from Malaysia, Singapore, Thailand, Indonesia, China, Australia and the UK.Operations will soon expand to serve customers in Japan, South Korea, the Philippines, the Middle East and India.
The centre can manage more than five million transactions a year in English, Bahasa Malaysia, Thai, Mandarin, Cantonese and Bahasa Indonesia.
DETAILS OF THE JOINT VENTURE
The eventual authorised and issued paid up share capital of ACCSB shall be RM1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each to be subscribed in equal proportions by Scicom and Air Asia.
In addition, Air Asia and Scicom shall each advance RM525,000 to ACCSB for its working capital requirements. The foregoing advances shall be free of interest and shall be repaid by ACCSB to Air Asia and Scicom respectively over a 24-month period on a proportionate basis. Any further financial support required by ACCSB from its shareholders shall be based on commercial terms and be mutually agreed upon by both parties.
Scicom shall for the duration of the Joint Venture provide to ACCSB such expertise and resources as is necessary for ACCSB to undertake an expansion of business and operations upon terms and conditions to be mutually agreed upon.
Subject to there being no event of default by Scicom or ACCSB which is continuing, Air Asia undertakes that it shall:
(i) at all times during the continuance of the JV Agreement channel and direct all of its current and future contact centre requirements to ACCSB including that of its group of companies;
(ii) agree to contract with and utilise ACCSB exclusively for its entire contact centre, back office and outsourcing requirements of Air Asia including that of its group of companies; and
(iii) use its best endeavours and do all acts and things as may be necessary to undertake business development and market development activities to provide the client base for the business of ACCSB and to assist ACCSB to source for customers and contracts worldwide.
The JV Agreement also contains provisions such as events of default, reserved matters and pre-emption rights of the parties.
INFORMATION ON AIR ASIA
Air Asia is principally engaged in the provision of budget air transportation services and currently owns and operates call centres in Thailand, Indonesia, China and Malaysia. Air Asia was listed on the Main Board of Bursa Malaysia Securities Berhad under the trading/services sector on 22 November 2004.
INFORMATION ON ACCSB
ACCSB was incorporated under the Companies Act, 1965 on 3 November 2008 with an initial authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which two (2) ordinary shares are issued and credited as fully paid-up. The intended principal activities of ACCSB will be to provide end to end solutions for customer contact management and contact centre services.
RATIONALE FOR THE JOINT VENTURE
Scicom and its subsidiaries (the “Scicom Group”) is involved in the provision of customer contact centre within the business process outsourcing (“BPO”) space, provision of customer contact centre outsourcing services, customer services training products as well as contact centre consulting and marketing services.
The Joint Venture is in line with the Group’s expansion strategy and is expected to enable the parties to leverage on their mutual strengths to increase earning contributions.
As stated in Section 1, the Joint Venture is expected to consolidate and streamline Air Asia’s existing contact centres into a single call centre located in Malaysia vide ACCSB. With Scicom making available its resources and call centre expertise to ACCSB, Air Asia is able to leverage on the partnership to better optimise its resources.