SHAH ALAM: LTAT Mulls Boustead Privatisation. The Armed Forces Fund Board (LTAT) the controlling shareholder of Boustead Holdings Bhd (BHB), is mulling plans to delist the publicly listed company. However there is no indication whether it will also do so for Boustead’s subsidiary company, Boustead Heavy Industries Corporation Bhd (BHIC) which is also listed on Bursa Malaysia. BHIC is the company involved in heavy engineering and defence related businesses, including the LCS, LMS and submarine ISS contracts.
From Bernama.
KUALA LUMPUR, May 28 — The Armed Forces Fund Board (LTAT), the controlling shareholder of Boustead Holdings Bhd (BHB), plans to propose an offer price of RM0.80 per ordinary share in BHB for its potential privatisation.
This offer price, however, is indicative only and non-binding, said LTAT in a statement here today.
“The final offer price in relation to the proposal (if undertaken) is subject to finalisation by LTAT,” it said, adding that the proposal is subject to, amongst others, the finalisation of the structure of the proposal, its requisite funding and the required regulatory approval for the proposal.
The pension fund highlighted that today’s notification does not amount to a firm intention that it will undertake the proposal.“Accordingly, there can be no certainty that we will proceed with the proposal.
“We will make subsequent announcement(s) on any material development in relation to the proposal in accordance with the rules on take-overs, mergers and compulsory acquisitions,” it added.
BHB holds equity interest in four publicly listed companies, namely Affin Bank Bhd, Boustead Plantations Bhd, Boustead Heavy Industries Corp Bhd and Pharmaniaga Bhd, all of which LTAT also has a stake.
BHB stock bagged four sen to 63 sen today, with 572,200 shares traded.
— BERNAMA
You can check other business publications for further news on this but most did not say anything much on the corporate exercise apart from that LTAT has not been getting much dividend from Boustead and other companies it hold interest in. For me instead of taking Boustead private, LTAT perhaps should use the money to make sure the LCS are completed instead , using its funds first and then claiming the money from the government once the ships are commissioned into service. But thats just me, a writer on focused on defence and national securities and not a business tycooon.
— Malaysian Defence
View Comments (30)
Encik Marhalim, even though the LCS program facing some delays but based on the keel laying and construction dates the second LCS ship must be ready to launch right? The hull must already completed (including 3rd and 4th LCS I think) for BNS to fullfill the contract obligation even the fitting out date still far away.
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Interestingly none of my sources are saying that the second one is close to being launch. It is the same with three and fourth. Most of the work had stopped I was told as BNS had not paid its subcontractors.
In business sense, maybe it's a good time for them to bail out. Normal businesses are roughing it out, theirs with such a narrow and almost monopolize scope, will be impossible without more government support in the near future.
Your recommendation will only stand if the word "patriotic" is out weight their business mission.
Thanks for the infromation.. I just made an assumption based on the construction date which is started past two or three years..didnt knew even the hull construction also stopped.
So, regarding to the delay of the LCS program RMN surely and urgently need more hulls for the patrol duties...the best decisions I think is:
1)Order more LMS ASAP.
2)Upgrade and refurbish old ships.
3)Get some secondhand hulls from other foreign navies.(last choice I think)
Should have let DCNS build the ships. We never learn from past mistakes
If LTAT were to use their cash reserves to bailout a publicly listed company by taking it private, that could anger the rest of their shareholders not to mention those ex-Armed Forces personnel since LTAT belongs to them in a way.
Since it was the previous Government's stance not to release funding to continue, LTAT must try again to lobby the current one in disbursing the needed funds in stages, at least to finish up the first 2 lead ships.
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LTAT is government owned, only serving soldiers contribute to it, its basically the services EPF
"basically the services EPF"
Yes, and it is the ex-personnel that depended on it for their retirement livelihood so any way that could jeorpardise LTAT's ability to continue providing this source of income will receive the wrath of the ex-personnel. We have clear history of how bailouts tended to lose even more money (Proton, MAS, Pewaja Steel, etc). Can our ex-personnel accept this fate?
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Like the EPF, most ex personnel will clean out their LTAT accounts when they reached their limit likely 55 now.
@ edliew
Bailing out? Probably you are misunderstanding the situation. LTAT wants to have 100% of boustead holdings for itself, buying all shares it does not already own.
@ MH
buying cheaper OPVs for MMEA would be a much better choice.
@ joe
In the current situation, it is probably the best move. stock prices are low, you have cash reserves so why not buy those shares? When the economy rebounds in 3-4 years time, list it back and you will have big profits for the retired military peoples.
This move and LCS is 2 different things altogether. This is spending to get assets for retired soldiers, while pumping LTAT money to complete the LCS is basically asking the retired soldiers to fund the decision mistakes that other people has done.
I believe all is well before May 2018.
Now, let the past be the past.
...
I was looking at it from Boustead end.
Just to share, once interviewed a local bank chairman. He said, a good investment is where you don't have to invest in infrastructure build which requires constant upkeeping. I would put Boustead as one of this and for LTAT to further dive into it without a healthy partner is investment down the drain 🤔