KUALA LUMPUR (Oct 2): Logistics service provider Sin-Kung Logistics Bhd (KL:SINKUNG) is diversifying into private jet charter and air freight cargo services with the acquisition of loss-making Prima Air Sdn Bhd for RM20.7 million cash.

Sin-Kung has entered into a share sale agreement with Tan Sri Halim Mohammad and Puan Sri Mazmin Noordin to acquire 20 million shares, representing the entire equity interest in the company, the group's bourse filing on Wednesday showed. 

Prima Air is engaged in the sale and leasing of aircraft. The company holds an air service permit, valid until March 31, 2025, and an air operator certificate, valid until Dec 31, 2025, allowing it to conduct non-scheduled commercial air transport operations.

“Following the completion of the proposed acquisition, Sin-Kung group is able to offer air feeder services and expects to enter into cargo interline agreements with its airlines customers to establish a strategic interline partnership to transport each other’s shipments on specific routes,” the group said.  

The current directors of Prima Air are Halim, his children Mariana Halim and Hisham Halim, and Othman Samat.

Prima Air has been loss-making for the past three financial years, with a higher loss after tax of RM6.72 million in financial year ended Dec 31, 2023 (FY2023) compared to RM1.76 million previously, as revenue declined 42.46% to RM4.25 million from RM7.38 million over the same period.

Sin-Kung intends to fund the acquisition through a combination of internally generated funds and/or bank borrowings. The proposed acquisition is expected to be completed by the end of 2024, subject to any unforeseen circumstances.

Shares in Sin-Kung settled half a sen or 2.78% lower at 17.5 sen on Wednesday, giving the company a market value of RM210 million. Since its listing on the ACE Market of Bursa Malaysia on May 17, the company's share price has gained over 34% from its initial public offering price of 13 sen.