KUALA LUMPUR (Feb 19): SMTrack Bhd has purchased an aircraft worth US$6.7 million (RM27 million) from a management consultancy firm Cakerawala Solution International Sdn Bhd as the former ventures into cargo carriage services.
In an exchange filing today, the radio frequency identification (RFID) solution provider said it has purchased a used unit of Boeing 737-400F series together with all installed parts, including auxiliary power unit and landing gear, major avionics, cabin interior, wheels and brakes.
“The acquisition was funded via the proceeds arising from issuance of redeemable convertible notes which was approved by the shareholders at the company’s extraordinary general meeting (EGM) held on Dec 28, 2020,” it said in a statement.
In October 2020, the group proposed to issue redeemable convertible notes with an aggregate principal of up to RM120 million to finance its diversification into the airline business.
It added SMTrack intends to utilise the proceeds from the proposed notes issue as a 60% down payment to lease an aircraft, and up to RM36 million for the purchase of an aircraft for cargo carriage services.
In 2019, the company bought a 60% stake in Jakarta-based Citilink Aviation (M) Sdn Bhd for RM2.8 million in 2019 as part of its effort to reduce its dependency on its track and trace business.
Citilink was established in 2001 as a low-cost brand of Garuda Indonesia.
According to its website, SMTrack, previously known as Smart Tag Solution Sdn Bhd, is primarily engaged in track and trace business that utilises RFID. It also offers provision of training, maintenance and consultancy services.
Following the acquisition, the group expects no material impact on its earnings for the financial year ending July 31, 2021.
Shares of SMTrack closed five sen or 2.5% lower at 19.5 sen, valuing the company at RM85 million.
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