BHIC Shareholders Voted in Favour

An eagle's eye view of the Lumut Naval Shipyard facilities in Lumut. Note the hangars at the end which was built specifically for the LCS using the funds of the project. Behind the first LCS, is likely KD Kasturi undergoing a refit since late 2021. Picture taken in 2022 by then-BNS.

SHAH ALAM: Boustead Heavy Engineering Corporation Bhd (BHIC) shareholders has voted in favour of all resolutions at its extraordinary general meeting, yesterday. The EGM was held virtually.

From New Straits Times:

KUALA LUMPUR: Boustead Heavy Industries Corporation Bhd (BHIC) has received shareholders’ approval for the debt settlement amounting to RM417 million which will assist its financial recovery.

The proposed debt settlement was approved at the extraordinary general meeting, with 99.92 per cent shareholders voting in favour of all resolutions tabled.

The resolutions included the amendment of the company’s constitution to facilitate the issuance of new conventional and Islamic redeemable convertible preference shares (RCPS) to the lenders and Boustead Holdings Bhd as part of the debt settlement.

The debt settlement will be made to Affin Bank Bhd, MBSB Bank Bhd, AmBank Islamic Bhd as well as to Boustead.

For the full story go here.

What about the resolution to dispose of Boustead Naval Shipyard (BNS) then? It was not voted on as BHIC had dropped the BNS resolution from its notice on the EGM published on December 28, two days after the Malaysian Defence post on it.

The Malaysian Defence post was based on the EGM notice published on December 14. Why did they drop the resolution when everybody knows about it then? I have no idea.

Anyhow, the deadline to sell BHIC’s shares in BNS to the government, is tomorrow. I do not think it will happen but who knows, right?

— Malaysian Defence

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7 Comments

  1. Just speculating, maybe because BHIC doesn’t own BNS. Based on the latest annual report, BHIC’s interest in BNS is around 22% held indirectly through an asociate company. The parent co, Boustead Group, is the larger owner of BNS holding 82% interest in BNS (which likely includes BHIC’s 22%). Latest reports says Boustead Group’s total interest is closer to 90%. It is likely the proper disposal flow is Boustead Group to dispose its interest which would include BHIC’s portion to MOF – because Boustead Group owns BHIC. I understand from latest reports the government already owns around 10% of BNS, which was formerly held by LTAT. If one reads through the debt settlement, the banks had to accept a fair bit of pain. Will have to check those banks financials to confirm.

  2. There is no way the banks will bear any costs of the Boustead saga. They will get their money either way. It must be noted that one of the banks that is owed by Boustead and its subsidiaries is Affin Bank which is partly owned by LTAT.

  3. What a sad, we have very good facilities (tech, equipment, yard, etc) and big and strong companies, but due to incompetent in management all of that just a waste.

  4. @Anon
    An with unrealistic expectations. Without prior experience or training at NAVAL, and without building the first units under their tutelage, the then Govt expected BNS to redesign Gowind into LCS and expect the team to start building without problems from the get go. Its like expecting a first year engineering student to start designing a building from scratch, and hoping it wont fall down. Crazy isnt it.

    The fact that under such circumstances the BNS engineering team managed to complete up to 96% of design works goes to show that we dont lack in technical capabilities but other areas had doomed the project. This is similar to OPV project as well.

  5. If BNS says they need 11 years to finalise the design for a project that was originally meant to be completed in 13 years, should they be considered good and having the technical capabilities in Year 12? The original PAC report is clear BNS had to pay more than budgeted to Naval Group because the project team did not have the know-how to design the ship. If one still thinks the local team is good, would one be willing to put their trust and RMN’s money in BNS winning the contract to design and construct LMS 2?

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