KUALA LUMPUR (May 7): Brahim's Holdings Bhd confirmed today that it is still in discussions with Malaysian Airline System Bhd (MAS) to mutually extend the cut-off date for the former’s new catering agreement.
This confirms a report by The Edge Financial Daily published today which stated negotiations for a new catering agreement have yet to be concluded, despite it having exceeded the revised April 30 cut-off date.
In a filing with Bursa Malaysia today, Brahim's (fundamental: 0.35; valuation: 1.2) said its 70%-owned subsidiary Brahim’s Airline Catering Sdn Bhd (BAC) is still engaged in discussions to mutually extend the new agreement cut-off date, which expired on April 30, 2015.
"The company will make further announcement on the developments," it added.
On April 1, both Brahim’s and MAS have agreed to extend the new catering agreement cut-off date from March 31 to April 30.
The Edge Weekly had reported on March 30 that the reason for the delay was MAS and Khazanah Nasional Bhd having yet to agree on the billing method for the in-flight meals.
To recap, Brahim's and the national carrier had earlier entered into a settlement agreement in February, to pave way for the settlement of certain disputes and the negotiations of a new catering agreement to replace the existing contract.
Some analysts noted the delay on the conclusion of a new catering agreement might not augur well for Brahim’s, which already faces tight cashflow problems.
Brahim’s share price heads higher today to an intra-day high of 96 sen. As at 3.30pm, the stock is trading at 93.5 sen, up 3.5 sen or 3.9% with 1.33 million shares traded.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)