KUALA LUMPUR (Dec 3): Financially distressed MMAG Holdings Bhd (KL:MMAG) has taken a step forward in its recovery efforts by securing a partnership with Malaysia Airlines Bhd.
The company said it has through its subsidiary, MJets Air Sdn Bhd, accepted a letter of award (LOA) from the national carrier to serve as the dedicated narrow-body freighter operator for MAB Kargo Sdn Bhd (MASKargo) from Jan 1 to Dec 31 next year, according to its bourse filing on Tuesday.
MASKargo is the air cargo arm of Malaysia Airlines. Both companies are units of the Malaysia Aviation Group Bhd.
MMAG was classified as a Guidance Note 3 (GN3) company — typically assigned to financially distressed ACE Market-listed companies — in early October, but was granted a waiver by Bursa Securities from the classification on Nov 15.
In a bourse filing on Tuesday, MMAG said the LOA with Malaysia Airlines is set to enhance its logistics and cargo capabilities, potentially positioning the company for a financial turnaround. MJets Air will expand its regional cargo feeder network, leveraging its extensive logistics infrastructure at the Kuala Lumpur International Airport to optimise operations.
The partnership, it said, aims to streamline cargo transportation services, benefitting both MMAG and MASKargo clients.
Although the LOA is not expected to have an immediate material impact on MMAG’s financials, the company anticipates positive contributions to its net assets and earnings for the fiscal year ending Sept 30, 2025.
Meanwhile, MMAG’s cumulative net loss of RM116.75 million on revenue of RM648.52 million for the first half of 2024 underscores the challenging road ahead.
MMAG, which has been reporting losses since 2015, saw its GN3 status triggered by a material uncertainty flagged by its auditor, Grant Thornton Malaysia PLT, in its audited financial statements for the financial year ending March 31, 2023.
MMAG shares closed 1.5 sen or 3.57% higher at 44 sen on Tuesday, valuing the company at RM1 billion.