KUALA LUMPUR (Dec 6): AirAsia Group Bhd has entered into a preliminary shareholders agreement with Universal Music Malaysia Sdn Bhd to set up a record label to promote Southeast Asian talents, it said in a Bursa filing today.

The joint-venture company (JVCo) will be named RedRecords Sdn Bhd and aims to popularise Asian pop music through artists and repertoire, artist development, music recordings and contents, management and agency services related to all entertainment activities, and music publishing and merchandising.

“The partnership with Universal Music aligns with AirAsia’s focus in developing talents in ASEAN. This will facilitate the ancillary revenue growth of AirAsia in the music industry, with Universal Music bringing in the necessary expertise and skills set to create a synergy which will enhance the musical venture.

“The joint venture forms part of the broader effort of AirAsia to position itself as an all-in-one travel and lifestyle marketplace,” it said.

Chairing the board of the JVCo are AirAsia Group chairman Datuk Kamarudin Meranun, while the directors are AirAsia X Bhd group chief executive officer (CEO) Nadda Buranasiri, Ong Chun Eng and Wong Ying Chong.

The budget carrier and music label will sign a definitive agreement within three months from Nov 29, which governs their rights and obligations as the shareholders of the JVCo.

The paid-up share capital of RedRecords will eventually be US$1 million (RM4.17 million), with the shareholding to be split equally between AirAsia and Universal Music.

The company’s operational and capital requirements will be met through third-party debt financing and a shareholder loan for the initial three-year period, by way of a drawdown fund of US$750,000 (RM3.13 million).

At afternoon break, shares of AirAsia were unchanged at RM1.67, with 3.82 million shares traded, giving it a market capitalisation of RM5.58 billion.