KUALA LUMPUR (Oct 30): Menzies Aviation (Malaysia) Sdn Bhd, a 49:51 joint venture between MMAG Holdings Bhd (KL:MMAG) and Menzies Malaysia Sdn Bhd, has secured a 12-month ground-handling licence from the Malaysian Aviation Commission (Mavcom).
With the licence, Menzies Aviation will be able to roll out its ground-handling services throughout Malaysia and provide "a comprehensive suite of services", such as passenger handling, aircraft servicing, ramp operations, and cargo management, according to MMAG in a bourse filing.
The licence is valid from Nov 1, 2024 to Oct 31, 2025 and is renewable on a yearly basis.
The commencement of Menzies Aviation’s operations enables MMAG to leverage Menzies Group’s extensive global network and resources, significantly expanding its air freight and cargo terminal customer base, enhancing KLIA's status as a regional hub and extending its market reach into new regions, MMAG said.
“Through streamlined ground-handling agreements and shared resources, the group anticipates cost savings and operational efficiencies.
“The board expects the business of Menzies Aviation to contribute positively to the overall future earnings of the group, should the potential benefits in relation to the ground-handling services be materialised,” it added.
MMAG, which has been a loss-making company since 2015, was classified as a Guidance Note 3 (GN3) company at the start of this month. The classification is typically for financially distressed entities listed on the ACE Market. This came about after its external auditor, Grant Thornton Malaysia PLT flagged a material uncertainty in the company's audited financial statements for the financial year ended March 31, 2023 (FY2023) that could affect its ability to continue as a going concern.
The group, however, has said it planned to submit an application for a waiver from the classification as it had already taken relevant measures to resolve its condition.
At an event on Oct 4, the group's executive director Victor Chin told reporters that the group was not facing cash flow issues despite its GN3 status as it had raised close to RM240 million via a rights issuance and conversion of warrants earlier this year. He said the GN3 status was only triggered because of a "timing issue", as the funds were raised after the audited financial statement was issued.
For the cumulative six months ended June 30, 2024, MMAG reported a net loss of RM116.75 million on a revenue of RM648.52 million.
MMAG shares closed unchanged at 28.5 sen on Wednesday, giving it a market capitalisation of RM658.3 million.