KUALA LUMPUR (Dec 6): ACE Market-listed MMAG Holdings Bhd (KL:MMAG) has proposed a share capital reduction to wipe out up to RM270 million of its accumulated losses.

“The proposed share capital reduction will enable the company and the group to rationalise their financial positions by reducing the accumulated losses,” the company said in a bourse filing on Friday.

At the group level, MMAG’s accumulated losses stood at RM290.2 million at the end of the audited 18 months ended Sept 30, 2024. This will be reduced to RM20.37 million after the share capital reduction. 

As of Dec 5, MMAG has an issued share capital of RM565.22 million, comprising 2.31 billion ordinary shares. Its issued share capital will drop to RM295.22 million after the exercise.

MMAG, which is involved in full-fledged integrated supply chain management, has been loss-making in the past nine financial years. Its financial year was recently changed to Sept 30, from March 31, for the financial period 2024.

For the 18 months ended Sept 30, 2024, the group posted a net loss of RM95.71 million, which it attributed to business expansion costs. Its revenue for the period was RM824.44 million. In the latest July-September quarter, the group booked a net profit of RM21.04 million, mainly on stronger ringgit and the reversal of impairments on recovery of receivables, it said.

On Nov 18, MMAG was granted a waiver by Bursa Securities from being classified as an affected listed company under Guidance Note 3 (GN3) after it improved its financial position through fund raising exercises. It previously fell into GN3 status — typically assigned to financially distressed ACE Market-listed companies — after its shareholder equity fell below 50% of issued share capital in the year ended March 31, 2023 (FY2023).

It raised RM145.34 million from its six-for-one rights issue at 10 sen per share in January, and RM92.09 million from warrant conversion, at 15 sen apiece, from January to September.

At end-June, it was in a net-cash position of RM52.6 million, not taking into account lease liabilities of RM52.62 million.

TA Securities has been appointed as the principal adviser to MMAG for the proposed share capital reduction.

Shares of MMAG closed unchanged at 42.5 sen on Friday, giving it a market capitalisation of RM981.59 million. Year-to-date, the stock has gained 347%.