KUALA LUMPUR: MMAG Holdings Bhd (MHB) today acquired 80 per cent stake in M Jets International Sdn Bhd (M Jets) for RM21.36 via shares sale agreement.
The company inked the deal with JT Aerotech Solutions Sdn Bhd (JTAS) for the acquisition, which comprises 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 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.
MMAG executive director Kenny Khow said 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," he said in a statement.
He said 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 electronics products are in crucial need.
He also said 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 degrees to -80 degrees.
MMAG also hopes to extend 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 the company is in the capacity and capability to do so.
Furthermore, as air cargo industry is a highly regulated with high barriers to entry, it is believed that there are currently only four 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 per cent 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.