BUSINESS

BRAHIM’S TO OUTSOURCE TAMADAM UNIT TO MHC FOR THREE YEARS

27/07/2021 09:01 PM

KUALA LUMPUR, July 27  -- Brahim’s Holdings Bhd has proposed to outsource the management and operations of its wholly-owned subsidiary Tamadam Industries Sdn Bhd to MHC Trading (M) Sdn Bhd for up to three years.

The airline caterer said it received a proposal from MHC to turn around and grow the business of Tamadam, which is presently operating below its optimal level.

“More importantly, it will provide Brahim’s with a solution to its outstanding loan position with OCBC Al-Amin Bank Bhd, for which it does not have the financial capacity to service at this juncture,” it said in a stock exchange filing today and added that the company has entered into an agreement with MHC to outsource the business.

It said profits generated from Tamadam would initially be used for the repayment of an overdue loan with OCBC based on the stipulated repayment schedule, and subsequently to be divided between MHC and Brahim’s on a 60:40 basis.

The key benefit to Brahim’s is MHC’s commitment to undertake the full repayment of the outstanding loan with OCBC which currently stands at about RM75 million.

“At present, Brahim’s core business of flight catering is unable to generate sufficient revenues due to the virtual standstill of the passenger aviation industry, leading to losses and inability to service its borrowings,” it said. 

In 2013, Brahim’s had obtained an Islamic financing facility of RM155 million from OCBC.

On April 22, 2021 the airline caterer announced it had received a letter of demand from the bank for the amount in arrears.  “The proposed outsourcing is not expected to have any immediate effect on the earnings per share, net assets per share, gearing, share capital and shareholdings of the company,” it said.

 However, Brahim’s expects it to contribute positively to the company’s future earnings per share and at the same time, its gearing level would be reduced.

-- BERNAMA

 

 


 


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