KUALA LUMPUR (Dec 14): The Armed Forces Fund (LTAT) has disposed of its entire direct stake of 8.16% in Boustead Heavy Industries Corp Bhd (BHIC) on Wednesday, leaving it with an indirect stake held via Boustead Holdings Bhd.

LTAT sold the 20.27 million shares “to assist BHIC in meeting the public shareholding spread requirement pursuant to the proposed debt settlement” announced by BHIC on Dec 6, it said.

Boustead Holdings holds 161.5 million shares in BHIC, representing a 64.99% stake in the shipbuilder.

Shares of BHIC traded unchanged at 55 sen at noon market break on Wednesday, giving it a market capitalisation of RM135.5 million.

BHIC had announced a plan to settle RM183.26 million worth of debts to Affin Bank Bhd, MBSB Bank Bhd and AmBank Islamic Bhd via cash payment, as well as the issuance of 68.9 million ordinary shares, and Class A Islamic and conventional redeemable convertible preference shares (RCPS).

BHIC is also settling RM234 million worth of debt to Boustead Holdings via the issuance of ordinary shares, as well as subordinated Class B and Class C RCPS to the shareholder (Boustead Holdings).

The ordinary shares issuance will see Boustead Holdings’ stake in BHIC raised to 72.38%, while AmBank Islamic will hold (4.96%), followed by MBSB (4.92%) and Affin Bank (2.33%).

In total, BHIC will issue 23.63 million RCPS A, 132.17 million RCPS-i A, 84.66 million RCPS B, and 78.95 million RCPS C. All of the preference shares are convertible to ordinary shares on a one-to-one basis, with no conversion deadline.

As at Nov 30, BHIC’s shareholders’ funds stood at RM53.5 million, after taking into account its accumulated losses of RM195 million.

Meanwhile, its cash and cash equivalents, based on its unaudited financial statements for the third quarter ended Sept 30, 2023 (3QFY2023), stood at RM10.39 million.