Malaysia Airlines (MAS) cancels LSG Sky Chefs-Brahim's minimum baseline revenue provision

(BRAHIMS opening price today (23.05.2012) was RM 1.15)

Brahim's Holdings Bhd said LSG Sky Chefs-Brahim's Sdn Bhd (LSGB) and MAS have mutually agreed to extinguish the minimum baseline revenue provision for the remaining duration of their contract until end of the year.

"We wish to state that in the past three financial years (FYE 2009 to FYE 2011), it has not been necessary for the provision on the minimum baseline revenue to take effect, as MAS' catering requirement at Kuala Lumpur International Airport and Penang Airport has well exceeded this baseline figure," it said.

In a statement released yesterday, the company said the catering agreement between LSGB and MAS remained intact and Brahim's remained confident of the prospects of the in-flight catering business.

Brahim's signed an agreement with LSG Sky Chefs (through LSG Asia GmbH) on Monday for the purchase of LSG Sky Chefs' (LSG) 49 per cent stake in their joint-venture company, Brahim's-LSG Sky Chefs Holdings Sdn Bhd (BLH), for RM130 million cash.

The deal is aimed at further increasing its footprint in the business.

LSGB, a subsidiary of BLH, is the principal in-flight services provider at KLIA and Penang International Airport and currently serves 36 international airlines.

Source: www.btimes.com.my

German Group LSG Sky Chef cashing out from its in-flight catering services joint venture with Brahim’s Holdings due to MAS' cost cutting plan to review long term contracts

(BRAHIMS opening price yesterday (21.05.2012) was RM 1.11)

LSG Sky Chefs has cashed out from its in-flight catering services joint venture in Malaysia with Brahim’s Holdings Bhd.

The German group yesterday struck a deal with Brahim’s to sell its 49 per cent stake in Brahim’s LSG Sky Chefs Holdings Sdn Bhd (BLH), held via LSG Asia, for RM130 million.

The deal will also see BLH renegotiate its technical assistance contract with LSG, Brahim’s said in its statement to Bursa Malaysia yesterday.

LSG-Sky Chefs-Brahim’s (LSGB), a subsidiary of BLH, signed a lucrative 25-year exclusive catering agreement for the Kuala Lumpur International Airport in Sepang and the Penang International Airport with Malaysia Airlines (MAS) in 2003.

MAS holds a 30 per cent stake in LSGB. At the time, LSGB also signed a 25-year deal with LSG Asia for various technical assistance.

According to the Bursa announcement, a new technical assistance contract will now supercede the one in 2003, and will only see another two years of such an arrangement with LSG Asia.

“There can be no assurance that any adverse change in the business relationship between LSG Asia and LSGB or expiry of the new technical assistance agreement will not have any material and/or adverse effect on the business operations of LSGB and consequently, BLH,” Brahim’s said.

“Notwithstanding this, the board believes that management of BLH and LSGB has the relevant expertise and experience in managing and operates LSGB after the expiry of the new technical assistance agreement.”

MAS’ plan to review contracts with its suppliers as a means to turn it around last year has put LSGB’s 25-year catering agreement in the limelight.

Brahim’s executive chairman Datuk Ibrahim Ahmad Badawi did not directly comment when approached after the company’s annual general meeting recently, but had hinted at possible talks.

Brahim’s expects the stake acquisition to be completed in the third quarter of the year, subject to shareholders’ approval.

Source: www.btimes.com.my

Brahim's Holdings buys remaining 49% stake in Brahims LSG Sky Chef for RM 130 million cash

(BRAHIMS opening price today (21.05.2012) was RM 1.11)

Brahim's Holdings Bhd has proposed to buy the remaining 49% stake in Brahim's-LSG Sky Chef Holdings Sdn Bhd (BLH) for RM130mil cash.

Brahim's said on Monday it had entered into a conditional share sale agreement with LSG Asia GmbH to acquire the 49% stake or 490,000 shares. The acquisition would be financed from bank borrowings.

BLH's 70%-owned subsidiary, LSG Sky Chefs-Brahim's Sdn Bhd (LSGB) is involved in catering and catering related services.

LSGB provides in-flight catering and related services at the Kuala Lumpur International Airport and Penang airport. LSGB has a 25-year concession expiring in 2028 to provide catering and related services to Malaysian Airline System Bhd at both airports.

Apart from MAS, LSGB also provides in-flight catering to over 35 airlines with the capacity to serve up to 50,000 meals daily at KLIA and up to 1,000 meals at the Penang airport.

BLH recorded profit after taxation of RM41.01mil and its consolidated net assets as at Dec 31, 2011 was RM95.93mil.

Source: www.thestar.com.my

Brahims Holdings to invest RM 130 mil to build the first sugar refinery plant in East Malaysia, target to complete by end of 2013

(BRAHIMS closing stock price today (15.5.2012) was RM 1.15)

Brahim's Holdings Bhd (BHB) is investing up to RM130mil to build the first sugar refinery plant in East Malaysia.

Executive chairman Datuk Ibrahim Haji Ahmad said on Tuesday the group, which currently generates more than 90% of its revenue from in-flight catering services, has targeted the plant to be completed by end-2013.

Brahim's which recently purchased a company licensed to be a manufacturer of refined sugar and molasses in East Malaysia, expects the sugar segment to contribute about RM250mil to the group's revenue in the first year of the plant's operations.

The investment will be financed via bank borrowings initially, Ibrahim said after the company AGM here.

Source: www.thestar.com.my