M&A on the cards for Brahim’s in H1?

KUALA LUMPUR: This year may see Datuk Ibrahim Ahmad Badawi ( pic), who holds an indirect 54.89% stake in Brahim’s Holdings Bhd, injecting more assets via privately held Dewina Holdings Sdn Bhd into the listed in-flight caterer-cum-restaurant operator.

Analysts who cover the stock believed Ibrahim would be injecting several assets into the company this year, with one saying the exercise could happen in the next few months.

“What I’ve heard is that the paperwork has been done, it just needs to be confirmed. I’m confident this exercise will happen in the first-half of the year,” she said.

Another analyst said it did make sense that a merger and acquisition could be in the offing, as the recent announcements on the tieup with Labuan Halal Hub Sdn Bhd (announced on Jan 16) and Japanese airline ANA Holdings Inc (announced on Jan 7) involved the provision of halal meals. Dewina Food Industries Sdn Bhd, a Dewina subsidiary, provides Brahim’s ready-to-eat meals and sauces.

“I’m not sure of the timeline, but these announcements could hasten the asset injection exercise,” he noted.

Ibrahim, who helms both Brahim’s and Dewina as executive chairman, declined to comment further on the matter.

“My privately held entities are not as big as Brahim’s. Several of the more recent projects announced need to be nurtured, but these projects have potential to be injected later on,” he told StarBiz.

He also did not discount a separate listing for Desatera Sdn Bhd, a joint venture (JV) between Dewina and Koperasi Angkatan Tentera Malaysia Bhd, which has been awarded a contract to operate military cookhouses up till 2026.

“Desatera has potential; it’s injectable but it can also stand on its own,” he said, adding that this venture, which operates 67 cookhouses, needed to be nurtured before any move to list or inject it into Brahim’s could be initiated.

Other ventures under Dewina, which Ibrahim said might be potentially acquired by Brahim’s, were Dewina Food; a plant manufacturing meals in Jordan in a 50:50 JV with a Jordanian government agency, an upcoming plant in Saudi Arabia, and a plant with a farm, including an abattoir and facilities for value-added products, in Ningxia, China, in which Dewina has a 49% stake.

While not new, the speculation, along with news of recent ventures, has attracted interest in the company’s stock, with the share price having risen about 132% since the beginning of July to RM2.21 on Jan 30, 2014.

Early last October, Koperasi Permodalan Felda Malaysia Bhd (KPF) emerged as a substantial shareholder in Brahim’s with a 5.2% stake, while pilgrimage fund Lembaga Tabung Haji, already a major shareholder with a 5.3% stake, acquired another 366,500 shares in early January.

KPF has a 20% stake in MSM Malaysia Holdings Bhd, which operates a sugar duopoly in the peninsula together with Central Refinery Sdn Bhd, part of the Tradewinds group.

Ibrahim said Brahim’s RM150mil sugar refinery near Kuching would be completed by the end of next year. The company plans to initially provide 180,000 tonnes of refined sugar in Sabah and Sarawak, where annual demand has been estimated to be around 300,000 tonnes.