KUALA LUMPUR (Jan 27): MMAG Holdings Bhd (KL:MMAG) announced on Monday that it is acquiring a second Boeing B737-400SF aircraft from Japan-based JPA No 161 Co Ltd (JPA) for US$6.55 million (RM29.12 million) in cash.

MMAG’s subsidiary, MJets Air Sdn Bhd, signed an installment sale agreement with JPA to purchase and take delivery of the aircraft, which is currently leased and operated by MJets Air for its freight business.

This marks the second Boeing B737-400SF aircraft acquisition by MJets Air from JPA, a wholly-owned subsidiary of JP Lease Products & Services Co Ltd (JLPS), one of Japan’s largest independent tax lease arrangers. Last December, MJets Air acquired the first aircraft from JPA for RM20.76 million, also paid in cash.

In its bourse filing, MMAG said the latest aircraft purchase is a strategic move that will deliver long-term benefits to the group and aligns with its broader strategy to optimise its air freight capabilities and streamline operations across its supply chain network.

“Ownership of the aircraft will reduce reliance on third-party lessors and eliminate the need for upfront Maintenance Reserve Fund (MRF) payments, while also offering the potential to capitalise on its resale or scrap value, resulting in significant long-term cost savings and improved asset management,” said MMAG.

MMAG said the purchase consideration will be funded via a combination of internally-generated funds and proceeds received from the group’s exercise of the convertible securities. As at end-September, MMAG’s cash and bank balances stood at RM66.41 million, while its borrowings totalled RM349.6 million.

The total payment will be made in three tranches, with an initial payment of US$1.55 million upon signing of the agreement, instalment payments totalling US$3.75 million over 25 months from the delivery date, and a final payment of US$1.25 million on the contractual expiry date.

MMAG noted that the instalment structure provides financial flexibility and enables the group to manage its cash flow effectively while securing ownership of the aircraft.

Barring unforeseen circumstances, the agreement is expected to be completed in the first quarter of 2027.

In November 2024, MMAG was granted a waiver by Bursa Securities from being classified as an affected listed company under Guidance Note 3 (GN3). The company had fallen into GN3 status after its shareholders’ equity dropped below 50% of issued share capital for the financial year ended March 31, 2023 (FY2023).

At Monday’s noon break, MMAG’s share price slipped one sen or 2% to 49 sen, valuing it at RM1.15 billion.

Uploaded by Magessan Varatharaja