KUALA LUMPUR (Feb 28): Main Market-listed Brahim’s Holdings Bhd (BHB) has lapsed into Practice Note 17 (PN17) status, after its shareholder equity fell below the 25% threshold.

In an exchange filing today, the catering services provider said it is now an affected listed issuer with risks of being delisted.

“Based on the unaudited interim financial results of BHB for the fourth quarter ended Dec 31, 2018, the shareholders’ equity of BHB on a consolidated basis of less than RM40 million represented 25% or less of its issued capital. Hence, BHB is now regarded as a PN17 company,” read the filing.

BHB said it has 12 months from now to submit a regularisation plan to the Securities Commission (SC) and implement it within a timefame stipulated by the SC or Bursa Securities thereafter.

In the event that it fails to comply with its obligations to regularise its conditions, BHB may face risks of being suspended and delisted from the stock exchange, it said.

The company said it is currently looking into formulating a plan to regularise its financial condition with announcements to be made in due course.

BHB was viewed as one of the stock market darlings, on track to becoming a mid-capitalised stock in 2013 and 2014 when it fetched a high of RM2.42. That was before its share price slumped below RM1 in 2015.

Attempts to stage a return after that were hardly successful as the stock has not been able to surpass the 60 sen-level since June 2016. Today, the stock was traded at 21 sen, compared with its 1994 issue price of RM2, giving BHB a market capitalisation of RM48.44 million.

In a separate filing, BHB announced its fifth consecutive year in the red, after turning in a widened net loss of RM103.14 million for the financial year ended Dec 31, 2018 (FY18), compared with a net loss of RM6.94 million in FY17.

It said slow recovery is expected from its in-flight catering business, in which performance has shown a decreasing trend, with only “marginal profit” to be recognised by end-2019.

However, the company expects its logistics segment to contribute positive to its financial position, seeing that the streamlining of its cost structure has turned out to be positive.

As at end-2018, BHB holds cash and bank balances totalling RM6.85 million, while short and long term borrowings amount to RM150.39 million in aggregate.