reezal 0 Report post Posted October 10, 2012 Same old story..... Brahim's-MAS catering deal "remains intact" Posted on 10 October 2012 - 10:40pm sunbiz@thesundaily.com PETALING JAYA (Oct 10, 2012): Malaysia Airlines (MAS) has backed out of plans to renegotiate its 25-year catering agreement with Brahim's Holdings Bhd, a move some quarters view as aimed at avoiding a possible financial penalty. The airline is already bogged down by operating losses to the tune of RM408.8 million in the first half of this year. A termination of the contract, which runs from 2003 to 2028, between Brahim's and MAS would have entitled Brahim's to a financial compensation from MAS. In a statement today, Brahim's said its catering agreement with MAS "remains intact" following discussions with representatives from MAS, and will proceed to reconvene an EGM that was adjourned in September after MAS had indicated its intention to renegotiate the catering deal. Shareholders were to have voted on Brahim's proposed acquisition of a 49% interest in Brahim's-LSG Sky Chefs Holdings Sdn Bhd from LSG Asia GmbH for RM130 million at the EGM, but had decided to adjourn the meeting until there was "greater clarity" on the status of its catering agreement with MAS. About 92% of Brahim's revenue comes from its contract with MAS. "We wish to inform that any operational issues will be reviewed and resolved progressively within the framework of the existing catering agreement. Brahim's will proceed with the needful to reconvene the EGM to relay its clarification with MAS to Brahim's Holdings' shareholders, that the catering agreement remains intact," the company said. SOURCE: http://www.thesundaily.my/news/512599 Share this post Link to post Share on other sites
Isaac 0 Report post Posted October 10, 2012 How much are they charging MAS for a typical hot meal (main course, appetizer, dessert, bread roll) in Y now ? Share this post Link to post Share on other sites
Mohd Azizul Ramli 2 Report post Posted October 10, 2012 There are just too many wrongs with this contract. A classic example of lack in internal control system fits for so many papers and case studies in ACCA, CIMA, ICAEW etc syllabuses. If MH, as a public listed entity, is upholding its mission statement of creating shareholders' wealth, they should take stern legal action against those acting on behalf of them that caused them to sign this awful contract whether they are still within MH's management or not. Share this post Link to post Share on other sites
KK Lee 5 Report post Posted October 10, 2012 Brahim is guaranteed minimum X profit every year hence no one can give accurate cost of meal until end of financial year. Share this post Link to post Share on other sites
Cire 0 Report post Posted October 10, 2012 (edited) There are just too many wrongs with this contract. A classic example of lack in internal control system fits for so many papers and case studies in ACCA, CIMA, ICAEW etc syllabuses. If MH, as a public listed entity, is upholding its mission statement of creating shareholders' wealth, they should take stern legal action against those acting on behalf of them that caused them to sign this awful contract whether they are still within MH's management or not. Totally agree. Brahim is guaranteed minimum X profit every year hence no one can give accurate cost of meal until end of financial year. What's with Malaysia?? Every thing mega is guaranteed a handsome (or not) profit yearly. In the airlines industry where jet-fuel price volatility determines an airline profit and loss, such a long term agreement could be signed? Best of all, if the article is correct, there's a clause where MAS would be heavily penalized if it backs out of the agreement. How much more? This beckons for more disclosure. And what are the benefits to MAS from Brahims commercially? It should be a win-win arrangement. With MAS giving a solid 25 years' catering service to Brahims, MAS should be entitled for a yearly cost reduction workable in percentage. This is in the assumption that the initial start-up capital by Brahims needs to be paid up initially but as its CAPEX starts to have lesser residue, the gains obtained should be shared with MAS by giving it a workable yearly discounts. In this arrangement, MAS would have a forecast savings (gain) at the end of its financial year, which could be interpreted as reduction in its operating cost. Hope more information will be exposed later on this golden deal. Edited October 10, 2012 by Cire Share this post Link to post Share on other sites
Amirul Mazlan 0 Report post Posted October 11, 2012 This is really rent seeking and corporate extortion finest example. Who would in the right mind signing a contract that was that long? Apart from highway and power generation business. Share this post Link to post Share on other sites
Radzi 2 Report post Posted October 11, 2012 50% chance the deal will be renegotiated after the general election? And it will depends on the voters. Share this post Link to post Share on other sites
jit 0 Report post Posted October 11, 2012 If MH, as a public listed entity, is upholding its mission statement of creating shareholders' wealth, they should take stern legal action against those acting on behalf of them that caused them to sign this awful contract whether they are still within MH's management or not. How? Those that signed that contract got a promotion... That's the catering contract.. wonder how's the other big ticket contracts.. e.g. aircraft leasing contracts that runs into billions?? Share this post Link to post Share on other sites
flee 5 Report post Posted October 11, 2012 50% chance the deal will be renegotiated after the general election? And it will depends on the voters. Yes, probably MH has been asked to "cool it" as election time is near. Disclosures of this unfair contract will make the current govt. look very bad. Share this post Link to post Share on other sites
Syukri 0 Report post Posted October 12, 2012 Read in the news today MAS disagree with the article.. They insists still reviewing the deal.. Share this post Link to post Share on other sites
Lock SH 0 Report post Posted October 12, 2012 Who DARES to stir "Badawi's" business?.......... Share this post Link to post Share on other sites
Isaac 0 Report post Posted October 12, 2012 Who DARES to stir "Badawi's" business?.......... Mahathir Share this post Link to post Share on other sites
Radzi 2 Report post Posted October 12, 2012 I just hope that something drastic will happen in the next GE so all these hanky-panky that has been plaguing the airline and the nation can be revealed and corrected. And hopefully the perpetrators can be punished as well. Share this post Link to post Share on other sites
Izanee 0 Report post Posted October 13, 2012 We all live in hope capt! Share this post Link to post Share on other sites
Isaac 0 Report post Posted February 24, 2014 Malaysia Airlines (MAS) should terminate its RM6.25 billion contract with in-flight caterer Brahim's Holdings Bhd Full story here: http://www.btimes.com.my/Current_News/BTIMES/articles/MASS20/Article/#ixzz2uAZbNeBd Share this post Link to post Share on other sites
Johan Z 0 Report post Posted February 24, 2014 Please be true.. Share this post Link to post Share on other sites
Cire 0 Report post Posted February 24, 2014 Its about time, but don't just stop there. Search the suppliers' list for more contractors to be eliminated. Share this post Link to post Share on other sites
BC Tam 2 Report post Posted February 24, 2014 Search the suppliers' list for more contractors to be eliminated.The flip side being that if they search and dig deep enough, there could be areas that warrant 'augmentation" instead Case of one step forward, two backwards ?! Share this post Link to post Share on other sites
Josh T 0 Report post Posted February 25, 2014 That catering deal needs to be terminated!!! Share this post Link to post Share on other sites
KK Lee 5 Report post Posted May 6, 2015 (edited) MH does have sub par product, especially when compared with their regional competitors. 7th Feb: KUL->HKG (MH 448) The nasi lemak was had just a spicy taste, whereas the ginger chicken on CX was pretty damn good. Apart from that, the service was a world of difference. I felt like the CX crew's performance was at the level of any business class, at least I felt so. The difference was even more obvious when you can compare them side by side like this. It seems MH/brahim catering no longer use premium jasmine rice to cook nasi lemak, hence, quality has deteriorated. Edited May 6, 2015 by KK Lee Share this post Link to post Share on other sites
KK Lee 5 Report post Posted May 8, 2015 It seem MH/brahim catering no longer use premium flour mix for dinner roll/bun, the taste and flavour of dinner roll/bun is uninteresting. Share this post Link to post Share on other sites
BC Tam 2 Report post Posted May 9, 2015 (edited) But your training should help you overcome the emotional outbursts and keep your composure under the most severe provocation. In reality, all that goes out of the window when faced with uncertainty of one's future with the company - essentially, experiencing absolute constipation It seem MH/brahim catering no longer use premium flour mix for dinner roll/bun, the taste and flavour of dinner roll/bun is uninteresting. Brahim’s, MAS extend new catering agreement to May 10 http://www.themalaysianinsider.com/business/article/brahims-mas-extend-new-catering-agreement-to-may-10#sthash.OJIsap7j.dpuf So we have only a couple days left to savour their delicacies ?! Edited May 9, 2015 by BC Tam Share this post Link to post Share on other sites
KK Lee 5 Report post Posted May 9, 2015 Brahim’s, MAS extend new catering agreement to May 10 http://www.themalaysianinsider.com/business/article/brahims-mas-extend-new-catering-agreement-to-may-10#sthash.OJIsap7j.dpuf So we have only a couple days left to savour their delicacies ?! This dateline is believed to be negotiation dateline. In the event MH/brahim catering couldn't come to an agreement, new supplier will need about 18 months to build a new catering facility to supply to MH. Rumour said brahim BOD kept rejecting negotiated proposals, hence negotiation was extended a number of times. Believe CM will take another approach to this negotiation. Share this post Link to post Share on other sites
Mohd Suhaimi Fariz 2 Report post Posted May 12, 2015 (edited) Brahims signs a new 5 year contract that promises to be 25% cheaper "Overall, the NCAs provide for a strict service level agreement and key performance indicators (KPIs) to be adhered to, considerably improved pricing, non-exclusivity and a shortened tenure, compared with the previous catering agreement, the statement added." http://www.thestar.com.my/Business/Business-News/2015/05/11/MAS-to-cut-catering-cost-by-25-pct-under-new-agreements-with-Brahims/?style=biz Edited May 12, 2015 by Mohd Suhaimi Fariz Share this post Link to post Share on other sites
Yang Zulhilmi 0 Report post Posted May 12, 2015 (edited) Brahims signs a new 5 year contract that promises to be 25% cheaper "Overall, the NCAs provide for a strict service level agreement and key performance indicators (KPIs) to be adhered to, considerably improved pricing, non-exclusivity and a shortened tenure, compared with the previous catering agreement, the statement added." http://www.thestar.com.my/Business/Business-News/2015/05/11/MAS-to-cut-catering-cost-by-25-pct-under-new-agreements-with-Brahims/?style=biz oh my.. bland sandwiches come to my mind.. Edited May 12, 2015 by Yang Zulhilmi Share this post Link to post Share on other sites