KUALA LUMPUR, 16 NOVEMBER 2020 – MMAG Holdings Berhad (“MMAG”), a company listed on the ACE Market of Bursa Malaysia today announced its acquisition of M Jets International Sdn Bhd (“M Jets”) through a Shares Sale Agreement between the Company and JT Aerotech Solutions Sdn Bhd (“JTAS”) to acquire 80% equity interest in M Jets for a total cash consideration of RM21.36 million which comprise approximately 5.69 million ordinary shares.
M Jets is currently involved in the business of provision of airline charter flights. Post-acquisition, M Jets will focus on cargo freighter business and this will be complemented by the induction of two (2) Boeing 737-400F which are scheduled to be ferried to Malaysia by mid December 2020. M Jets targets to commence the inaugural flight by end January or early February 2021.
With the acquisition of M Jets, MMAG will be able to complete the supply chain with first mile, middle mile and last mile delivery to be the nation’s first local full-fledged integrated supply chain management company from the private sector with its own air cargo services.
“Due to the current Covid-19 pandemic, there is a surge in demand of e-commerce but regrettably most passenger airplanes are currently not in service. This led to a serious shortage of courier space to cross-border destinations such as East Malaysia as the delivery services were previously substantially fulfilled by riding on the passenger belly space of the airlines and the waiting time for an available space may take up to 14 days currently. Hence, with the acquisition of M Jets, MMAG Group will be able to have its own planned schedule delivery for timely delivery and reducing the need for the use of a third party agent,” stated Kenny Khow, Executive Director of MMAG.
“Other than that, in view of the current pandemic whereby medical and biosecurity related logistics catering to products such as medicines, test kits, vaccines, personal protective equipment (“PPE”) and etc in addition to high value and electronics products are in crucial need. Not to forget, Malaysia and the world are currently facing challenges in preparing for the logistics and distribution of the vaccines and bio related products which may require temperature setting that ranges from anywhere between 2 ̊C to -80 ̊C, therefore, MMAG also hopes to extend our assistance and support in the logistics and required supply chain management to help Malaysia and its surrounding countries in the fight against Covid-19 in which we are in the capacity and capability to do so,” he added.
Furthermore, as air cargo industry is a highly regulated with high barriers to entry, it is believed that there are currently only four (4) major air cargo operators in Malaysia. As supply is very scarce, but demand is tremendous and the current operators could not cope with the overwhelming demand. Therefore, the acquisition of M Jets will allow MMAG Group to expand its network and connectivity, domestically and internationally, to include both land and air logistics. M Jets has set its target on the untapped market and selected routes that is currently underserved by the industry.
Upon completion of the acquisition, JTAS will be 20% equity shareholder of M Jets and the directors of JTAS will provide necessary expertise and knowledge to work closely with MMAG’s management to run and operate the day-to-day business of M Jets.