MMAG disposes a freighter aircraft at RM12.7mil loss

KUALA LUMPUR: MMAG Holdings Bhd is auctioning a Boeing B737-400SF converted freighter for US$2.8 million (RM11.43 million), as part of its ongoing evaluation of its aviation assets and services. In a Bursa Malaysia filing, the company revealed that MJets Air Sdn Bhd entered into an aircraft purchase agreement with Mont Gabanon Airlines on Oct 19.

The decision to sell the aircraft was prompted by escalating geopolitical tensions, global uncertainty, and a sharp surge in fuel prices which have greatly increased operating costs and depleted charter demand. The purchase of the aircraft by MJets Air was made on Jan 24, 2025 for US$6.55 million. Given its unaudited net book value of RM24.12 million as of Sept 30, 2026, the disposal is projected to lead to a loss of RM12.69 million.

The funds from the expected disposal will primarily be used to cover MJets Air's working capital requirements, including trade and other payables, operating expenses, lease rentals, and other daily business expenditures. This will enable MJets Air to maintain its ongoing operations and manage its working capital requirements. The buyer will make an earnest deposit of US$1 million prior to inspecting the aircraft, with the remaining US$1.8 million payable upon the successful completion of the inspection.

The aircraft is set to be delivered to a location outside Malaysia, with completion anticipated in Q4 of 2026 unless unforeseen events arise. The board believes that the proposed disposal is in the company's best interests, as retaining the aircraft is not commercially viable due to the absence of viable deployment plans. The proposal will aid the group in reducing its financial burden and streamlining its aviation operations.