Boustead Heavy Industries to sell 20.8% stake in Lunas for RM334.7m

KUALA LUMPUR: Boustead Heavy Industries Corporation Bhd’s (BHIC) indirect wholly owned subsidiary Perstim Industries Sdn Bhd (PISB) has proposed to dispose of 27,000,001 ordinary shares in Lumut Naval Shipyard Sdn Bhd (Lunas) to Ocean Sunshine Bhd (OSB) for RM334.73 million cash.

In a Bursa Malaysia filing, BHIC said the proposed disposal is designed to support the government’s decision to ensure the completion of the Littoral Combat Ship (LCS) project.

“On May 29, 2023, BHIC announced that its board had acknowledged receiving a letter from the Minister of Finance Incorporated (MOF Inc) stating its intention to acquire, through OSB (an indirectly owned company), 20.8% of BHIC’s total equity interest in Lunas, which is held via PISB.

“The terms of the proposed acquisition are still subject to negotiations between the parties,” it said. BHIC said this initiative is also a part of the company's operational and organisational restructuring, aiming to streamline and realign entities within the company and its relevant subsidiaries.

Additionally, it said that introducing a new strategic shareholder, OSB, aligns with LUNAS' plans to enhance its business and operations, particularly in the construction, repair and maintenance of naval and commercial ships.

“The restructuring ensures that Lunas can complete the construction and delivery of the LCS to the Royal Malaysian Navy within the agreed timeframe, as stipulated in the LCS contract,” it said.

Barring any unforeseen circumstances and subject to all relevant approvals being obtained, the proposals are expected to be completed by the second quarter of 2024. – Bernama