Comfortably Numb

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.

A close up of Maharaja Lela at the BNS yard in Lumut taken in 2018.

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.

The rear end of Maharaja Lela sticks out from the shipbuilding hangar as seen from the Pangkor ferry in 2018.

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

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