SHAH ALAM: Comfortably Numb. The government, according to Defence Minister DS Ismail Sabri, decided to allow the resumption of the Littoral Combat Ship (LCS) project to protect the interest of the workers and companies and also the RMN.
He said the continuation of the construction of the ships would save 1,600 workers comprising local people from losing their jobs and more than 400 vendors comprising Bumiputera SMEs. “If the construction of this LCS is not continued, it will have a negative impact on the workers and the Bumiputera vendors involved.
The hull of the third LCS and the keel of the fourth LCS as seen from another angle in 2018.
Despite what he said it is distressing to see that Boustead is trying to get the courts to ensure that the debts it have with its vendors – some of it Bumiputera companies – be settled in a way that will suited it the most.
Although the hull of the second LCS looks complete, she is still missing a lot of her superstructure. Picture taken in 2018.
From The Edge:
A subsidiary of listed company Boustead Holdings Bhd, namely Boustead Naval Shipyard Sdn Bhd (BNS), will know on June 2 whether the High Court here will grant leave for a restraining order against its creditors and allow the firm to enter into a scheme of arrangement for more than RM1 billion of its debts.
High Court Judicial Commissioner Liza Chan Sow Keng fixed the date after hearing submissions on the issue from legal representatives of Boustead and the 15 financial institutions or creditors on Wednesday evening. BNS was represented by Lee Shih and Nathalie Ker of Lim Chee Wee Partnership.
Some of the companies involved in trying to fight the order are:
Since then, it is understood that other creditors have intervened in the ongoing court proceedings over the scheme of arrangement. Besides MTU Services, others include Contraves Sdn Bhd, Axima Concept SA, Contraves Advanced Devices Sdn Bhd, Contraves Electrodynamics Sdn Bhd and Tyco Fire, Security & Services Malaysia Sdn Bhd, as well as iXblue SAS, iXblue Sdn Bhd and Protank Mission Systems Sdn Bhd.
Also included are Bank Pembangunan Malaysia Bhd, AmBank Islamic Bhd, AmBank (M) Bhd, MTU Services, Affin Hwang Investment Bank Bhd, Bank Muamalat Malaysia Bhd, Affin Bank Bhd, Bank Kerjasama Rakyat Malaysia Bhd, Malayan Banking Bhd (Maybank) and Kuwait Finance House (Malaysia) Bhd.
It is interesting to note that Contraves Advanced Sdn Bhd are among the companies that are also trying to prevent this from happening. The company is partly owned by Boustead itself. Representatives of some of these companies have also met with Ismail this week likely asking him to intervene on their behalf.
I am not a lawyer and even my Google research on the order being sought by Boustead does not convey a full understanding of the matter. But I believed – I could be wrong of course – Boustead is seeking to ensure that it does not need to pay all of the outstanding debts with its creditors at one go but instead wanted a schedule much more beneficial to itself. And it is likely payments will be much lower than the amount billed.
How it this going to help its creditors – mostly companies involved as subcontractors, and their workers then? And by burning bridges with its local sub-contractors it may well indicate that BNS be given permission to finish only two ships then.
— Malaysian Defence
View Comments (16)
Marhalim,
I suppose there's a court process going through, based on your article above? Are you allowed to observe the process, or is it restricted ?
Reply
Its not restricted but I don't have the time to go for it, if I even found out the time and exact date of the proceedings. Usually this kind of things are also done via the filing of documents only and not open hearing like criminal ones. That's why you seldom see this kind of things reported in local newspapers.
The other 4 LCS likely to be finish by other contractor.
It is quite normal for a company being sued to bankruptcy to seek for debt restructuring, tho its usually between both parties. The reason why BNS is going to court cuz the creditors had issued a legal demand for debt payment and threatening bankruptcy. Normally the outcome would be some settlement either on the total sum claimed, the timeline for repayment, or a combination. Worse case scenario it turn into bad debts if BNS cannot pay & really do go under.
The sad thing is, the main reasons for reviving this project isn't for TLDM needs firstly but it is to 'save' local companies and local jobs.
Isnt 6 bill already paid supossedly being used to buy all equipment needed to complete 6 ships? Or that was just a farce from BNS to suck govt money to pay off their credit?
Not the first time. During Naval Dockyards time the company I was working for was ask to take a substantial haircut if we want our money immediately. If we dont accrpt thete will be no payments n even if thete is payment it will be draged on for 7 to 8 uears. A bird in hand is better than two in the bush. So balls kena squeezed. My boss accepted.
But this time thete are both Financial n commercial creditors. Banks can be squeezed to accept. But commercial creditors would be more troublesome.
So can Boustead get its way?. Too many creditors object.n the rescue scheme does not go ahead. Surely the court will be faie to creditors too.
Thats why chop Boustead off n allow a new jount vemture between designer n newco to complete the ship
Sad to see uncompleted mega project....like i said in past post...it will be completed when all of its electronics...cms...weapons are about to be obsolete...thats the way it is...and upgrades projects will follow there after...the vicious circle will keep its rotation no matter what....the best next things to do is buy Turkey..,pakistan...iran...UAE...or eastern block countries...Serb..estonia...ukarine...
@RedSot
There are some silver lining to the delays as we could uparmed the ships with latest VL Mica NG that doubles the range now. otherwise, most of the equipment and armament are state-of-the-art and bear in mind mil tech have longer shelf life compared to smartphone generations.
Not sure what is the stage of legal actions. However , there are two types of actions which creditors can take.
First stage is legal notice of demand. For a corporation after the Notice of Demand is served, expired n company cant settle, immediate winding up can be taken. This action is very fast n tremendous pressure.
The other way is notice of demand, serve satement of claims , replies etc n go for either summary judgment or full trial
Thereafter Judgment is granted to either plaintiff or defendant.
If judgment is pro plaintiff, the plaintiff can proceed with execution
@Joe..That maybe the case but what we are arguing here is the fact that (most probably) BNS will only allowed to finish only 2 ships with 6bill already paid to them with the possibility for a 3 bill more just to finish that said ships..Imagine spending 9 billion just for 2 ships..4.5billion pership..Push them to finish that ship,sue the hell out of them and bury them for good..
Reply
How to sue the hell out of them, BNS is a state owned company.
Hurray...the LCS vertical launch can be upgraded to mica NG...but alas at what cost...the launcher need to be replaced...the hardware n software need to be upgraded n sync with the CMS..intergration cost...all in all the boat will never touch sea since we are always spoilt for choices n the court case will be infinite....so by the time TLDM get its boat will be...?
Reply
The Mica NG can use the MICA VL launchers. You can read it in the earlier post on the MICA NG