KUALA LUMPUR: MMAG Holdings Bhd, through its indirect unit MJets Air Sdn Bhd, is disposing of a Boeing B737-400SF converted freighter for US$2.8 million (RM11.43 million), as part of its ongoing review of its aviation assets and operations.
In a Bursa Malaysia filing, the group said MJets Air had entered into an aircraft purchase agreement with Mont Gabanon Airlines on Oct 19.
MMAG said ongoing geopolitical tensions, global uncertainty and a sharp rise in fuel prices had significantly increased operating costs and weakened charter demand.
It added that demand for this aircraft model was insufficient to generate revenue to cover its operating costs, making it a financial burden to the group.
The aircraft was acquired by MJets Air on Jan 24, 2025, for US$6.55 million.
Based on its unaudited net book value of RM24.12 million as at Sept 30, 2026, the disposal is expected to result in a loss of RM12.69 million.
"The proceeds received from the proposed disposal will be mainly used for MJets Air's working capital requirement, including but not limited to the payment of trade and other payables, operating expenses, lease rental and other day-to-day business expenditures.
"The utilisation of proceeds will enable MJets Air to support its ongoing operations and manage its working capital requirements," it said.
Under the agreement, the buyer will pay an earnest deposit of US$1 million before inspecting the aircraft, followed by the remaining US$1.8 million upon satisfactory completion of the inspection.
The aircraft will be delivered to a mutually agreed location outside Malaysia, with completion expected in the fourth quarter of 2026, barring unforeseen circumstances.
"The board is of the view that the proposed disposal is in the best interests of the company, as the continued retention of the aircraft is not commercially viable in the absence of any viable deployment plans.
"In view of the above, the proposed disposal will enable the group to reduce its financial burden and streamline its aviation operations," MMAG said.
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