KUALA LUMPUR (Feb 5): The Armed Forces Fund Board (LTAT) reassured the public that the discussions with relevant stakeholders on the restructuring of Boustead Holdings Bhd, which is laden with RM6.7 billion debts, are continuing.

The LTAT's statement was made in response to an article by The Edge Malaysia weekly, which reported that Datuk Ahmad Nazim Abd Rahman had resigned as LTAT’s chief executive officer after Boustead’s restructuring was put on hold by the Ministry of Defence (Mindef) in mid-December.

In the statement, LTAT said that “at this juncture, no final decisions have been made” on Boustead’s restructuring, which it added is a component of the larger LTAT Strategic Plan 2023-2025.

The army pension fund, which is under the purview of Mindef, also emphasised that throughout any engagement process, the government had been “thoroughly professional and upheld the appropriate governance in seeking the best resolution to the matter”.

“LTAT wishes to clarify that it remains committed to ensuring the long-term sustainability of the fund, and will continue to explore all investment options together with the relevant stakeholders, including regulatory bodies and Mindef, as mandated by the Tabung Angkatan Tentera Act (Act 101),” it said.

The fund added that it will continue to enhance the returns of its investment portfolio, and “in pursuing that goal, will consistently take into consideration the wider benefits and impacts associated with it”.

In his resignation letter to Defence Minister Datuk Seri Mohamed Khaled Nordin, sighted by The Edge, Ahmad Nazim pointed out that delaying any decision on Boustead’s restructuring beyond January “would shorten the runway for the execution, and present a significant risk to the balance sheet of LTAT, and impact our ability to meet the minimum dividend target for this year”.

“Given the lapse of time, I am afraid I could no longer pursue the mission and fulfil the mandate of my job," The Edge quoted Ahmad Nazim as saying in the resignation letter.

Ahmad Nazim resigned on Jan 31 with immediate effect. He was appointed on June 15, 2021. The fund has yet to announce his replacement.

LTAT, however, in the statement reiterated that it views the restructuring of Boustead both as a structural and an investment decision that will undergo various internal and external processes to ensure it is made in the best interest of the contributors.

To this end, resolute measures are being implemented via collaborative engagement to identify and secure the optimal solution, the fund added.

To recap, during Ahmad Nazim’s tenure, he took Boustead -- the flagship of LTAT -- private. Soon after, he proposed for LTAT and Boustead Holdings to dispose of 33% of Boustead Plantations Bhd for RM1.15 billion to Kuala Lumpur Kepong Bhd, in a move that would help reduce Boustead Holdings' debts of RM6.76 billion as at end-March last year.

The deal was called off in October last year, and instead LTAT is forking out RM1.15 billion to acquire the remaining 32% not owned by the fund and Boustead.