LTAT Mulls Boustead Privatisation

KD Tunku Abdul Rahman at its welcoming ceremony in 2009. There is no horizontal bump on the rear of the conning tower. Malaysian Defence picture.

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.

KD Keris arriving at the Sepanggar naval base jetty for the welcoming ceremony

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.


Sea water was sprayed on Maharaja Lela and fireworks boomed as part of her launch gimmick.

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

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About Marhalim Abas 2186 Articles
Shah Alam


  1. 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.

    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.

  2. 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.

  3. 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.

  4. 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)

  5. Should have let DCNS build the ships. We never learn from past mistakes

  6. 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.

    LTAT is government owned, only serving soldiers contribute to it, its basically the services EPF

  7. “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?

    Like the EPF, most ex personnel will clean out their LTAT accounts when they reached their limit likely 55 now.

  8. @ 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.

  9. 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 🤔

  10. Bring Boustead private?. Wjat gor. Nothing will change. At least last time its supervised by the shareholders. Now management can have sole say.
    Whats the point?. It wont help the LCS be completed. Nothing will change. Tje LCS will remain uncompleted. Already our defence capability has been badly affected by them not completing any ship.
    Better they sell off to people who can run it better. Just tow away any hulls completed n let other capable yards complete them. For the rest let the capable party rent the yard to complete them for the sake of the Navy n the country.
    In future no more work for Boustead

  11. @Marhalim
    I wasn’t aware if most of them fully withdraws once retired. The ones I work with doesn’t as they prefer to let it sit while getting dividends.

    Boustead is under a lot of pressure, as their plantation, properties, heavy industries, and finance sector businesses aren’t doing well at the same time. Our economy has just restarted and we still don’t know the full aftermath of Covid19. Boustead could lose even more money before it bottoms out and this will be born by LTAT hence why now isn’t the right time to buyout unless the point is to prop up Boustead from going under.

  12. @M.H
    1)Order more LMS ASAP.

    TLDM is planning to order 8 more LMS for next 5 years. Hopefully cheaper with no Chinese systems

    2)Upgrade and refurbish old ships

    Lekius got their new CMS. FACs will get new engines.

    3)Get some secondhand hulls from other foreign navies.(last choice I think)

    No need as we already invested alot in LCS and LMS. Plus TLDM dont want to add anymore old ships. Used hulls for MMEA might be a good option but should focus on building more Damen OPV first

  13. @ joe

    Boustead has a real gem in its portfolio. The pharmaceutical company Pharmaniaga Berhad. This is IMO worth getting the group private, now the share price is dirt cheap.

  14. @…
    Yeah I’m aware of that but one gem can’t save a shitload of loses. And even Pharmaniaga is under pressure from cheaper generic medicines & supplements from India. Pharmaceuticals takes loads of R&D money & manpower resources to continuously be on the competitive edge and its not getting cheaper nor easier with many discoveries getting less and less; the reason why Bayer and Merck merged.

  15. Pharmaniaga is a monopoly in supply of medicine to the gov. They dont make anything. They just buy n resell. Medicine to gov is more expensive since need to go through middleman

  16. Somethin is so wrong with our war ship industries ie BNS.Its been a prolonged and well known problems since forever..not after May 2018..but i must say its forever.Have we not learned from Egypt,Singapore and even Indonesian about “Shipbuilding for Idiots”..and how slow we are in this busines?Top people changes,gov injected funds,changes in management but still,we keep on repeated the same old problems.I dont see any positive in any move or changes within BNS.At least not for another 10 years.

  17. @ JunTau

    Other countries has not seen a political upheaval like we are experiencing during our Gowind build.

    There is basically no decisions done for the past 2 years and many things cannot move forward because of indecision.

    Top people changes only happened in the past few weeks or so. No additional funds have been injected, although there is a request by the shipyard.

    Yes we cannot see anything happening so far, but we need to have a decision to move forward by the end of the year. We cannot let 3 years past by without any progress on the Gowinds. And we need to make sure all 6 will be operational latest by 2025.

  18. ..i get bns got cost overrun of some 1.4billions..but surely govt paid them enough already to finish the first ship at the very least..or im missing something here..does govt need to pay lump sump all 9 bill programme cost then the first ship can be finish or ?

    AFAIK the payments are made in terms of progress of the project ie the milestones of the project. I am not purview to the actual details however. But then within a short time of the previous government took over it set up an audit committee to look over all projects. Although they have not indicated anything on the LCS program we can infer from the decision to resume the MD530G made known in late February that any progress or approval took a long time. Mat Sabu late last year announced that BNS had asked for extra money to finish the project. By late January I was told that the then government had approved the extra money in principle but no funds have been disbursed yet. By late March as you are aware a new government was sworn in. I have been told that since last year most of the work on the ships had come to a stand still mostly due to the audit, as they cannot continue working on them as the whole project was being audited. Any work done or current ones I am told are for maintenance only not for completing them. I have tried to get comments from RMN on the progress to no avail and the minister I am told is busy with Covid 19 for the moment. The MCO also forced the closure of the yard until just recently and it was opened recently but again only for maintenance work

  19. ..”Top people changes only happened in the past few weeks or so.”

    I am not talking about Gowinds..i am talking about Boustead with its delays,substandarts quality,massive cost over run,politiking and how changes of people within BNS would still a failure.BNS issues are not about the last two weeks of changes..pls check their past services to the gov.BNS should just be sold off

    To whom that the question. Even if I am not a business man I am pretty sure any other investor would want to know how he or she will make money from buying it. Perhaps by getting an iron clad promise of future businesses? Which will defeat the purpose of selling it in the first place then? Any buyer will also need to get through security checks as the shipyard is located adjacent to a naval base and it has in its records plenty of stuff it’s done for the navy. So it’s not really an easy answer

  20. @JunTau

    Could you provide examples of shipbuilding projects that have been managed by Boustead?
    AFAIK right now only the Gowinds are being done by them. LMS was cancelled by Mahathir, and NGPV was PSC.

    Also any sources on substandard build quality and other things that you mentioned. And judging from Marhalim’s reply to your comment it’s not entirely the fault of Boustead either.

    Yes the easy answer is to sell off BNS, I think if it was up LTAT they will do so but again my earlier questions are valid. The original poster suggestion is also valid but its an easy goal without answering what had happened in the first place. I am not saying Boustead leaders, past ones, dont have any responsibility for the current troubles

  21. @Marhalim

    Sorry..I don’t really get what you’re saying. I was referring to JunTau assertions on BNS projects although I do agree that Boustead top management must and should not be allowed to walk away scot free.

  22. Better wait for the result of the audit before finger pointing.

    I guess 22 months wasted,

    Guan Eng didnt give money,

    Mat Sabu dont know what to do at all.

    I think in this instance Mat Sabu knows what is at stake, as Lumut Parliamentary seat is held by an Amanah MP.

  23. “the payments are made in terms of progress of the project ie the milestones of the project”

    Paid 70%..and asking for over run of 1.4b and the first ship is not even 60% complete and is not even out of the dry dock..what kind of progress payment is this.

  24. @ juntau..

    IKR..6 billions already paid to them should be enough for them to finish the first boat..That what we are arguing here..If 6 bills already been paid, BNS must deliver LCS1 on time as i understand that one LCS only take 1+bill to finish..

  25. @ firdaus

    The problem is that the 6 billion already spent to build 4 ships and probably materials for the next 2 also. items that is supposed to be provided by the government but is not there disturbs the build flow and makes completion impossible. money spent on 2 years of indecisions needs to be considered too.

  26. So its a miscalculation then but i dunno from which side..that LCS3 and LCS4 is keeled to early tbh..should only keel them when the first one is close to completion so that BNS’s focus are not divided into 4 ships at the same could be manage better too if lets say BNS only build max 2 LCS at a time..

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