Boustead Heavy Industries Corp Bhd’s (BHIC) fully owned unit BHIC Defence Technologies Sdn Bhd (BHICDT) has signed an agreement with Switzerland based RD Investment AG (RDI) to form a joint-venture (JV) company in Malaysia.
The agreement is part of a plan to restructure and rebrand their businesses into one entity named Contraves Advanced Devices Sdn Bhd (CAD).
CAD will implement the contracts awarded to BHICDT and RDI, under the Royal Malaysian Navy Littoral Combat Ships Programme for combat system-related infrastructure and services.
BHICDT and RDI agree that the initial issued and paid-up capital of CAD will be RM1 million only, represented by one million ordinary shares of which 510,000 will be allotted to BHICDT and 490,000 shares will be allotted to RDI.
Malaysia Reserve
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Boustead's concept model of a second generation patrol vessel.
KUALA LUMPUR: Boustead Heavy Industries Corp Bhd (BHIC) and German defence firm Rheinmetall AG plan to set up a new joint venture (JV) engaged in project management, contract administration and related services for the Malaysian defence industry.
BHIC told Bursa Malaysia that its wholly owned sub-subsidiary BHIC Defence Technologies Sdn Bhd (BHICDT) would hold a 60% stake in the JV company while Rheinmetall Air Defence AG’s unit RD Investment AG (RDI) will own the rest.
BHIC’s previous JV with Rheinmetall Air Defence - Contraves Advanced Devices Sdn Bhd (CAD) - is an electronic systems manufacturing and service company.
In April 2013, CAD was awarded 10-year, RM514.99mil contracts to supply towed array sonar and surveillance radar for the Royal Malaysian Navy’s six second generation patrol vessels or littoral combat ships (LCS).
In September that year, Rheinmetall Air Defence transferred all of its 49% equity in CAD to its wholly owned subsidiary, RDI.
Under a share and business restructuring agreement, BHIC and Rheinmetall agreed that BHICDT would have management and leadership for the LCS combat system equipment procurement and integration business (with the exemption of certain specific business affairs). The parties agreed to form a new JV company for this.
RDI, via CAD, will retain the management and leadership of the electronic and additive manufacturing, integration and training services business for defence, industrial and aerospace markets.
CAD will continue to implement the contracts awarded to them under the Royal Malaysian Navy LCS programme, namely providing the fire control system and combat management system.
The new JV company, meanwhile, will handle the LCS programme’s transfer of technology obligations to be fulfilled by DCNS SA, France, which is the design authority for the LCS as well as the combat management system.
The business of the JV company would be conducted in its best interests in accordance with good and sound commercial profit-making principles, BHIC said.
“The board believes that the investment will strengthen BHIC Group’s existing relationship with RDI, which may open up other future potential business collaborations, on a win-win basis for both companies particularly in the Malaysian defence industry,” BHIC said.
BHIC told Bursa Malaysia that its wholly owned sub-subsidiary BHIC Defence Technologies Sdn Bhd (BHICDT) would hold a 60% stake in the JV company while Rheinmetall Air Defence AG’s unit RD Investment AG (RDI) will own the rest.
BHIC’s previous JV with Rheinmetall Air Defence - Contraves Advanced Devices Sdn Bhd (CAD) - is an electronic systems manufacturing and service company.
In April 2013, CAD was awarded 10-year, RM514.99mil contracts to supply towed array sonar and surveillance radar for the Royal Malaysian Navy’s six second generation patrol vessels or littoral combat ships (LCS).
Under a share and business restructuring agreement, BHIC and Rheinmetall agreed that BHICDT would have management and leadership for the LCS combat system equipment procurement and integration business (with the exemption of certain specific business affairs). The parties agreed to form a new JV company for this.
RDI, via CAD, will retain the management and leadership of the electronic and additive manufacturing, integration and training services business for defence, industrial and aerospace markets.
CAD will continue to implement the contracts awarded to them under the Royal Malaysian Navy LCS programme, namely providing the fire control system and combat management system.
The new JV company, meanwhile, will handle the LCS programme’s transfer of technology obligations to be fulfilled by DCNS SA, France, which is the design authority for the LCS as well as the combat management system.
The business of the JV company would be conducted in its best interests in accordance with good and sound commercial profit-making principles, BHIC said.
“The board believes that the investment will strengthen BHIC Group’s existing relationship with RDI, which may open up other future potential business collaborations, on a win-win basis for both companies particularly in the Malaysian defence industry,” BHIC said.
BHIC ties up with RD Investment to incorporate new JV company
KUALA LUMPUR (Aug 16): Boustead Heavy Industries Corp Bhd (BHIC), via its sub-subsidiary, BHIC Defence Technologies Sdn Bhd (BHICDT) today signed a joint venture agreement with Swiss-based RD Investment AG (RDI) to form a joint venture company(JVCo) in Malaysia.
According to a Bursa Malaysia filing today, RDI, a subsidiary of Rheinmetall Air Defence AG (RAD), will be responsible for the management of the electronics and additive manufacturing, integration and training services business for defence, industrial and aerospace markets.
BHICDT will be responsible for the management of the Littoral Combat Ship combat system equipment procurement and integration business of the newly formed company.
In 2010, BHICDT had entered a JV agreement with RAD for the purpose of regulating its JV company then known as Contraves Advanced Devices Sdn Bhd (CAD).
By an agreement dated Nov 5 2012 between RAD and RDI, RAD had agreed to transfer all of its 49% equity in CAD to its wholly-owned subsidiary, RDI.
The change of shareholding for CAD from RAD to RDI was effected on Sept 23 2013.
The parties had on July 10 2017 signed a Share and Business Restructuring Agreement (SBRA) to restructure and rebrand their business activities. Pursuant to the SBRA, the parties agreed that RDI shall have within CAD the management and leadership of the electronics and additive manufacturing, integration and training services business for defence, industrial and aerospace markets.
Additionaly, BHICDT shall have management and leadership of the Littoral Combat Ship combat system equipment procurement and integration business (with the exemption of certain specific business affairs as set out in the SBRA) for which the parties had agreed to jointly incorporate a new JVCo.
CAD will continue to implement the contracts awarded to them under the Royal Malaysian Navy Littoral Combat Ships Programme for the provision of the Rheinmetall Fire Control System and provision of the Combat Management System together with combat system-related infrastructure and services.
The new JVco will have a paid-up capital of RM1 million, in which after 60 days of incorporation, BHICDT will hold 60% of the shares and RDI, 40%.
The main business activity for CAD will surround the defence industry in Malaysia, such as the remaining Littoral Combat Ship, Combat System Equipment and Combat Management System procurement, Combat System Engineering and Combat System Integration activities.
Besides that, CAD will also be the recipient of the Littoral Combat Ship Programme Transfer of Technology with French naval design company, DCNS SA.
BHIC expects that the JVco will contribute positively to the earnings of the group by the end of this year.
"The Board believes that the investment will strengthen BHIC Group existing relationship with RDI, which may open up other potential business collaborations, on a win-win basis for both companies particularly in the Malaysian defence industry," it added.
Emir Zainul
theedgemarkets.com
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