PETALING JAYA: Radio frequency identification (RFID) solution provider SMTrack Bhd is venturing into the low-cost airline industry in Malaysia.
It has entered into a memorandum of understanding with Dexma Express Sdn Bhd to establish a working arrangement to explore the potential investment from the upcoming PT Citilink Indonesia’s operation in Malaysia.
SMtrack will acquire a 60% stake in Dexma’s operation for RM2.8 million.
Dexma is specialised in the sale of carriage by air services for both passenger or cargo. It has established a partnership program with Citilink where Dexma is the appointed general sales agent for air carriage services of passenger and cargo.
Dexma will establish another partnership programme with Citilink for the setting up of Citilink Malaysian’s operation.
Citilink, headquartered in Jakarta, Indonesia, is principally involved in the domestic and international carriage by air services, whether through scheduled or charter flights, for passengers and/or cargo. Citilink is a low-cost brand of Garuda Indonesia, set up to operate shuttle services between Indonesia cities.
Since July 30, 2012, Citilink has officially operated as a separate subsidiary of Garuda Indonesia, operating with its own call sign, airline codes, logo and uniform. Citilink main base is Soekarno-Hatta International Airport and Juanda International Airport.
Dexma will change its name to Citilink Aviation Malaysia Sdn Bhd subject to Companies Commission of Malaysia approval. It will also obtain air operator certificate and any other licenses or permits required for the purpose of Citilink Malaysia’s operation.
“The MOU is to assist the parties to open up to each other in respect of the potential investment in Citilink Malaysia’s operation,“ SMTrack said in a stock exchange filing.
The MOU will be in effect for a year from the date of the MOU and can be renewed by written agreement of both parties. It can be terminated by either party at any time by providing notice in writing to the other party.
SMTrack and Citilink irrevocable confirm and agree to enter into the share sales agreement within three months from the date of the MOU upon which it will supersede the MOU.
The parties agreed to sign non-disclosure agreement in sharing several relevant and necessary information for the potential investment.
Dexma is to provide the term sheet and business plan together with its financial projections and valuation for the planned Malaysian operation for SMTrack’s consideration.
Source: The Sun Daily