KUALA LUMPUR (Oct 4): Boustead Heavy Industries Corp Bhd (BHIC)’s planned disposal of a 20.77% stake in troubled Boustead Naval Shipyard Sdn Bhd (BNS) to the Ministry of Finance (Inc) has been extended by 21 business days as the parties involved require more time to fulfil conditions precedent to the RM1 deal.

BHIC told the local stock exchange on Wednesday that the agreement for an extension by both parties came after the expiry of the conditional period on Tuesday.

The deal was part of the government’s intention to take full control of the RM9.13 billion littoral combat ship (LCS) project that BNS failed to deliver on time.

According to BHIC’s past disclosures, the divestment is conditional upon fulfilling conditions precedent within 30 business days, or a further period of 21 business days or such longer period as the parties may agree.

There were four conditions precedent, including execution of a conditional intercompany trade receivables reorganisation agreement to be entered into between BHIC and BNS.

The agreement was meant for the repayment of RM383.94 million or such other sum owed by BNS to BHIC.

Other conditions precedent include necessary written consent from BNS’ lenders and BHIC’s financiers or creditors.

The deal is also conditional upon completion of due diligence review and all remedial actions undertaken and completed to the satisfaction of MOF.

Of the remaining equity interest in BNS, Boustead Holdings holds a direct stake of 68.85%, while Lembaga Tabung Angkatan Tentera (LTAT) owns 10.38%.

LTAT took Boustead Holdings private in June this year.

Shares of BHIC closed two sen or 3.85% lower to 50 sen on Wednesday, giving it a market capitalisation of RM124.23 million.

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