KUALA LUMPUR (Aug 19): Pos Malaysia Bhd is selling 51% of its air cargo business in East Malaysia to Asia Cargo Network Sdn Bhd (ACN) for RM40 million cash.

In a bourse filing, Pos Malaysia announced that its wholly-owned unit Pos Aviation Sdn Bhd entered into a share subscription agreement (SSA) and shareholders agreement (SHA) with ACN to dispose of a 51% stake in Pos Asia Cargo Express.

Upon completion of the deal, ACN and Pos Aviation will hold a 51% and 49% stake in Pos Asia Cargo Express respectively. The company will be renamed  World Cargo Airlines (WCA).

On the rationale of the stake sale, Pos Malaysia noted that WCA is a non-core business, allowing for the latter to be managed more effectively with improved reliability and service performance by ACN.

The proceeds from the sale will be used by WCA to settle intercompany debts owed to Pos Aviation and Pos Malaysia amounting to RM37.8 million (as of Nov 15, 2019).

Pos Malaysia Chief Executive Officer (CEO) Syed Md Najib Syed Md Noor said the transaction will allow it to enhance services rendered to customers.

“Through the partnership, we aim to leverage on ACN’s experience and expertise to provide more value to our customers by offering enhanced air cargo connectivity, efficiency and speed.

The regional network of ACN will provide synergistic opportunities for Pos Malaysia as KLIA is being developed as a regional e-fulfilment cargo hub. This will also allow Pos Malaysia to focus on meeting customer expectations in our core business consisting of postal, courier and retail services,” he said.