Brahim's in talks to extend deadline for new catering agreement

PETALING JAYA: Brahim's Holdings Bhd, which missed its extended deadline for concluding a new catering agreement with Malaysian Airline System Bhd (MAS), said its 70%-owned subsidiary Brahim's Airline Catering Sdn Bhd (BAC) is in discussions to extend the new agreement cut-off date further.
The extended cut-off agreement date expired a week ago, on April 30, 2015.
Brahim's had agreed to a 60% cut in payments withheld by MAS amounting to RM94.03 million, and a 25% reduction in its final monthly bill, in a settlement agreement (SA) between BAC and MAS, in an effort to remain as an inflight meals caterer to MAS in early March.
In the off-chance that an new catering agreement is not entered into all the conditions agreed upon in the settlement agreement will be deemed null and void.
BAC will then return the disbursed first payment of 50% of RM38 million, and BAC will be entitled to seek legal recourse against MAS on any claims and sums withheld.
According to the group's annual audited accounts for the year ended Dec 31, 2014, MAS alone contributed some RM253.75 million in revenue to its catering services division in 2014. The catering services segment alone contributed RM342.8 million to the group's total revenue.
In 2013, MAS contract alone had contributed RM302 million to the group's revenue according to its audited accounts.
The group saw a net loss of RM33.8 million, against RM353.9 million revenue for the financial year ended Dec 31, 2014.