BHIC extends conditional period for Boustead Naval Shipyard stake disposal for fourth time to Jan 31

KUALA LUMPUR (Jan 2): The planned disposal of a 20.77% stake in troubled Boustead Naval Shipyard Sdn Bhd (BNS) by Boustead Heavy Industries Corp Bhd (BHIC) to the Ministry of Finance, Inc has been extended for a fourth time to Jan 31, 2024.

In a filing on Tuesday, BHIC said the extension agreement was reached after the expiration of the third extended conditional period on Dec 31, 2023, as the involved parties require more time to fulfill the conditions precedent to the RM1 deal.

"For avoidance of doubt, all other terms and conditions of the SSA [share sale agreement] remain unchanged," the filing read.

The disposal is part of the government’s plan to assume full control of the RM9.13 billion littoral combat ship (LCS) project, which BNS failed to deliver on time.

On Aug 18, 2023, BHIC's indirect wholly owned subsidiary Perstim Industries Sdn Bhd (PISB) had entered into an SSA with Ocean Sunshine Bhd (OSB), an indirect unit of Minister of Finance, Inc.

PISB was to dispose of its stake in BNS to OSB, with the conditions precedent to be fulfilled within 30 days of the date of the SSA, or an agreed-upon extension of 21 days, or a longer period determined by parties to the agreement.

The deal would then be deemed completed within seven days of all the conditions being met.

The conditions precedent include executing a conditional inter-company trade receivables reorganisation agreement between BHIC and BNS, focused on settling the repayment of RM383.94 million or any other amount owed by BNS to BHIC.

Other prerequisites involve obtaining necessary written consent from BNS' lenders and BHIC's financiers or creditors.

Boustead Holdings currently holds a direct stake of 68.85% in the remaining equity interest in BNS, with the Armed Forces Fund Board (LTAT) owning 10.38%. Notably, LTAT took Boustead Holdings private in June 2023.

Shares in BHIC traded 1.5 sen or 3.13% higher at 50 sen at the time of writing, giving the group a market capitalisation of RM122.99 million.