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Airline caterer Brahim’s gets payment default notice from OCBC

Airline caterer Brahim’s gets payment default notice from OCBC
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KUALA LUMPUR (April 22): Brahim’s Holdings Bhd yesterday received a payment default notice from OCBC Al-Amin Bank Bhd as the airline caterer was unable to fully settle the overdue rental sum of RM49.88 million as at April 1, 2021 under an Islamic financing facility granted by OCBC to Brahim’s, which has been contending with the impact of the Covid-19 pandemic.

In a statement to Bursa Malaysia today, Brahim’s said the Practice Note 17 (PN17) company is facing cash-flow difficulties due to the impact of the pandemic. 

Brahim's said its financial difficulties began in 2019, when it was initially designated as a PN17 company.

"Amid the Covid-19 pandemic, the situation has since become worse and the company is currently facing cash flow difficulties. The company has engaged in discussions with OCBC for a hair-cut and settlement negotiation which is currently still in progress. 

"This scheme of settlement should form a part of the company's PN17 regularisation plan,” Brahim’s said.

Brahim’s said it has been given seven days from yesterday to settle the RM49.88 million payment, failing which OCBC, which is represented by law firm Shook Lin & Bok, will have no choice but be compelled to demand that the amount be paid immediately.

Brahim’s, which has pledged its 100% stake in Tamadam Industries Sdn Bhd to secure financing from OCBC, said the Brahim's is planning to dispose of and liquidate Tamadam to raise money, which will be used to partially settle the amount due to OCBC. 

"The company will use the proceeds from the disposal to be part of the settlement and to further negotiate the remaining outstanding [amount].

“Engagement with the bank was done and deliberated [upon] on [a] frequent basis and the company will be required to firm up the disposal plan and to craft [a] more concrete and substantial proposal for the bank's consideration,” Brahim’s said.

According to Brahim’s, OCBC can exercise its right to recover the payment due to the bank from the securities that OCBC holds as pledged assets for the financing given to Brahim’s. 

Brahim’s said the securities include those in Tamadam. 

"It’s the opinion of the company (Brahim’s) that OCBC should not have proceeded with this demand letter or even [with the] legal proceedings against Brahim’s to recover the outstanding amounts. 

"Nevertheless, the company will engage with our existing legal firm as to continue the communication between the company, the bank and their solicitors,” Brahim’s said.

According to Brahim’s, the firm, which has been a PN17 entity since Feb 28, 2019, is an investment holding company with no ongoing operations.

"As for operating subsidiaries, there will not be significant impact [from] the default in payment on the business, financial and operations of the remaining business of the group. 

"Nevertheless, the group shall endeavour to continue its other remaining business operations notwithstanding the default and will engage with the lenders and suppliers for their continuous support,” Brahim’s said.

At 3pm today, Brahim’s share price had risen half a sen or 2.22% to 23 sen, which gave the company a market capitalisation of about RM61.7 million.

Brahim’s has 268.27 million issued shares, according to its latest quarterly financial report.

For the financial year ended Dec 31, 2020 (FY20), Brahim’s net loss widened to RM153.21 million, from a net loss of RM14.03 million a year earlier, while revenue fell to RM82.39 million from RM308.7 million.

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