KUALA LUMPUR (Oct 19): MMAG Holdings Bhd (KL:MMAG) is disposing of a Boeing 737-400SF cargo aircraft for US$2.8 million (RM11.43 million) as the group seeks to reduce costs amid rising fuel prices and weaker demand for charter services.

In a bourse filing on Monday, MMAG said its indirect subsidiary MJets Air Sdn Bhd has entered into a deal to sell the aircraft to Mont Gabanon Airlines, which is owned by a privately held company incorporated in the Democratic Republic of Congo.

MMAG said the transaction will result in a loss of RM12.69 million based on the aircraft's unaudited net book value of RM24.12 million as at Sept 30, 2026, compared with the selling price of RM11.43 million.

MJets Air had acquired the aircraft for US$6.55 million in January 2025.

MMAG said the disposal, which is expected to be completed in the fourth quarter of 2026, is part of its review of its aviation assets and is expected to ease its financial burden while allowing the group to streamline operations.

“In view of the current ongoing geopolitical tensions and global uncertainty with sharp escalation in fuel prices, it has not only materially increased operating costs, but reduced charter demand, particularly for this model of aircraft which continues to impose financial burden to generate sufficient corresponding revenue to cover the operating costs,” the group said.

Proceeds from the sale will be channelled towards MJets Air's working capital requirements, including operating expenses, lease payments and outstanding payables.

Based on MMAG's pro forma estimates, the disposal would increase its loss attributable to shareholders to RM91.93 million from RM79.24 million for the financial period ended March 31, 2026.

For the three-month period ended June 30, 2026, MMAG posted a net loss of RM9.42 million on revenue of RM166.09 million. There are no comparative figures as the group changed the financial period to end March 31, 2026.

As at end-June, the group's total liabilities stood at RM566.18 million.

The group's net assets would also decline to RM184.68 million from RM197.37 million, while its gearing ratio would rise marginally to 0.18 times from 0.17 times.

Shares of MMAG Holdings closed half a sen or 25% higher at 2.5 sen on Monday, valuing the group at RM58 million.