KUALA LUMPUR (Aug 3): MMM Group Bhd (KL:MMM) plans to appeal against Bursa Securities’ decision to reject its proposed regularisation plan to exit Practice Note 17 (PN17) status for financially distressed companies.
MMM said it is in the process of submitting its appeal and will announce developments on it later, its bourse filing showed on Monday (Aug 3).
MMM, which has been classified as a PN17 issuer since October 2019 after its shareholders' equity fell below 25% of its issued share capital, has until Aug 9 to appeal against Bursa's decision. Failing that, or if the appeal is unsuccessful, the company's securities will be delisted two market days after notification from Bursa.
Bursa Malaysia rejected MMM's regularisation plan last month, citing concerns over its proposed RM16 million acquisition of outdoor advertising company EDSB Outdoor Sdn Bhd. Bursa noted that the purchase price was significantly higher than EDSB's net assets of about RM800,000. A plan to convert 26 billboards to digital would have increased the total investment to RM22.16 million.
Although EDSB founders Chong Yoke Lai and Gan Soon Choon have provided a profit after tax guarantee of RM2 million annually for the financial years ending Dec 31, 2026 (FY2026) to 2028 — RM6 million in total — the guaranteed earnings are significantly lower than the acquisition price and did not sufficiently demonstrate the company's long-term earnings sustainability beyond the guarantee period, Bursa noted.
The stock exchange also raised concerns over the acquisition being a full-cash transaction, leaving the vendors with no equity participation in the enlarged MMM and no exposure to the future risks and performance of the business.
In addition, Bursa also questioned the sustainability and viability of EDSB's business, noting that its revenue declined to RM6.09 million in FY2025 from RM8.62 million in FY2023,while the company recorded losses in three of the past four financial years.
Bursa pointed out that the completion of the acquisition is conditional upon EDSB obtaining approvals for 144 operating sites. But the company expects to secure these only by the second quarter of 2027, potentially delaying implementation of the regularisation plan, Bursa noted.
So, MMM could incur additional costs and resources to regularise the remaining 84 sites and face potential regulatory risks if approvals are not obtained, Bursa added.
Bursa also highlighted that the group's proposed capital reduction would eliminate accumulated losses of RM32.65 million and improve shareholders' equity to about RM42.8 million; the improvement stems largely from “accounting adjustments rather than sustainable operating profitability”.
MMM failed to demonstrate to Bursa’s satisfaction that the circumstances that led to its PN17 categorisation had been comprehensively addressed, or that the risk of the company falling back into financial distress had been sufficiently mitigated, the stock exchange added.
The EDSB acquisition was announced in August 2025.
The regularisation plan included a rights issue with free detachable warrants and a private placement to raise up to RM39.97 million, alongside a 10-for-one share consolidation. Grand Portfolio Sdn Bhd, controlled by Chen Jui-Liang, undertook to subscribe for at least 108.33 million rights shares, which would raise its stake in MMM to 30.81% from 12.51%.
For the full-year ended March 31, 2026 (FY2026), MMM Group posted a net profit of RM3.02 million, compared with a net loss of RM615,000 in FY2025, as revenue more than doubled to RM17.93 million, from RM7.97 million.
The higher revenue was mainly driven by higher contributions from the event management, out-of-home and lift-up projector segments, its bourse filings showed.
Formerly known as Asia Media Group Bhd, MMM's share price was last traded at three sen per share, valuing the group at RM5 million.