Five main modules can be built by five separate shipyards - LCS way forward

 

The RMN NGPV are of "modular" Meko 100 design which is a smaller version of the Meko 200. There are five main modules which can be built by five separate shipyards and later assembled together viz the forward section, the midship section, the aft section, the forward gun module and the CIC module. I have no knowledge of the LCS design. If it were of modular concept, then the construction works can be distributed to, say, NGV Tech - forward section, MSET - forward gun module, BNS - midship section, HLL - aft section, Grade One - CIC section. Other Class B shipyards can can also participate, i.e UniKL Mimet to build the funnel assembly, Destiny - hangar section, etc. etc. If I were a corrupt minister/ RMN/ BNS  trying to collude with, say, MSET, there would be four other shipyards in the consortium to apprehend and blow the whistles. It's not easy for me to corrupt all five shipyards. This seems like a hypothetical assumption but worth trying

Malaysia should have learned from Australia when the latter built Anzac Meko 200 warships by distributing the works to a consortium of shipyards, not a monopoly by a single shipyard. This combined effort approach would provide broader, hence, stronger and more resilient project management. The LCS is of tonnage that must be built by Class A shipyards. In Malaysia there several such shipyards

The yards involve will   proof their best works & result. Then we will know, if it happen when one yard fail, other yards progressively advance. If any shipyard face challenges , quickly the main contractor can  investigate. Then we have check & balance. Well, just like other nations spread the project amongst their yards, US  UK AUSSIE practice this.

Looks like Indonesia going to spend much less than our RMN LCS though theirs are much much bigger in term of tonnage/size and i suppose many others. Looklike everytime we bought something, it's always more expansive than other countries.. Our LCS price is abt US490M/unit whereas Iver Huitfeldt class frigate  by Indoneia cost  at US325/unit only. Maybe our LCS parts make from gold. .Even our LMS from China cost about RM250m 

/ ship and it's  just for a simple vessel of less than 70m with simple cms @ to support only 30mm gun. If we really go on open market the price of that LMS that we bought fm China should not be more than RM100M. 

 

Courtesy from 

Syed Sharom

Zainal Rashid

Wan Zul 

RMNOA Brain storming Group. 

Zahid said wasn’t defence minister when billions paid despite warships’ non-delivery, but will help in PAC probe

 Friday, 18 Dec 2020 01:06 PM MYT

BY IDA LIM

MALAY MAIL

 Datuk Seri Ahmad Zahid Hamidi today clarified that he was not the defence minister when the government paid out over RM6 billion for warships that were not delivered as part of a RM9 billion project awarded to a company. Zahid however said he would still cooperate with the Public Accounts Committee (PAC) in the bipartisan Parliament watchdog’s inquiry on the RM9 billion project.

Yesterday, PAC chairman Wong Kah Wong had provided updates on an ongoing PAC probe on the non-delivery of the warships, noting that the project worth more than RM9 billion was awarded through direct negotiations in 2014 to the main contractor Boustead Naval Shipyard (BNS) Sdn Bhd for the supply of six units of second-generation Littoral Combatant Ships (LCS) warships to the Royal Malaysian Navy. In this project which is the largest-ever acquisition by the Defence Ministry, Wong said RM6.083 billion had been paid as of October 2020 but without a single LCS delivered by BNS, despite the schedule requiring two LCS ships to be completed by now and requiring the first ship to be delivered in April 2019.

Today, Zahid stressed that he was only defence minister from April 2009 to May 2013. “It is wished to be explained that the failure of supply by Boustead arose only in 2019 where at that time I was no longer holding the position as defence minister,” he explained in a statement posted on his Facebook page. Zahid also noted that BNS is owned by Boustead Holdings Berhad, with the latter’s largest shareholder being the government-owned Lembaga Tabung Angkatan Tentera (LTAT) and the second-largest shareholder also being the government-owned civil servants’ pension fund Retirement Fund Incorporated (KWAP). Zahid then referred to the two existing audit reports on the warship’s non-delivery as cited by Wong — the Auditor-General’s Report (LKAN) 2019 Series 1 (Compliance Audit of Ministries/Federal Departments) as well as the Governance, Procurement, and Finance Investigation Committee (JKSTUPKK)’s report. When commenting on the two audit reports, Zahid said the government’s 2002 guidelines for procurement through direct negotiations state that such procurements can only be made after obtaining the Finance Ministry’s approval, and that the defence ministry had already provided further explanation on the status of the issue of late fines to Boustead, and that the ministry had also stated that it had prepared a letter of demand and handed it over to the controlling officer for approval. Again highlighting that he was only defence minister until 2013, Zahid said that this issue is beyond his knowledge and that the scheduled payments to Boustead were made in 2019 when he was no longer holding the ministerial post. “Therefore, I have no knowledge and no control on any decisions made by the ministry regarding the issue of scheduled payments,” he said.

While saying he respected the PAC’s role in ensuring continuity in the government’s structure and management, Zahid however said it should be “more sensitive” in handling the investigation process especially regarding the issue of national security as it is still at the investigation stage. “I wish to stress that this explanation does not at all change my intention to continue to provide cooperation and help PAC in completing its investigation,” he said. Yesterday, Wong had said that the PAC had so far held four meetings and proceedings with witnesses for its inquiry on the warships project, with proceedings during the November 5 to November 16 period attended by individuals such as Auditor-General Datuk Nik Azman Nik Abdul Majid, Defence Ministry secretary-general Datuk Seri Muez Abd Aziz, and JKSTUPKK chairman Tan Sri Ambrin Buang who is also the former auditor-general. Wong had said the PAC proceedings on the warships will continue in early January next year with more witnesses to be called, including Zahid as the former defence minister, former Malaysian Navy chief Tan Sri Abdul Aziz Jaafar and representatives from the main contractor BNS Sdn Bhd.

Wong said PAC will also visit the LCS shipbuilding site in Lumut, Perak in January 2021, with the watchdog intending to expedite the proceedings to present a report to the Dewan Rakyat. Former deputy defence minister Liew Chin Tong had in September told the Dewan Negara that Putrajaya’s special investigation committee on procurement, governance and finance, had discovered that RM1 billion of the RM5.94 billion paid for the warships could not be traced, and had in October urged the government to investigate the missing RM1 billion.

WHY MUST THE LITTORAL COMBAT SHIP PROJECT IN MALAYSIA CONTINUE?

Over the last two decades, Malaysia has made concerted efforts toward modernizing its navy. The 15 to 5 Transformation Programme has been the basis of the Royal Malaysian Navy (RMN)’s recent restructuring agenda. This program focuses on acquiring new ships to replace aging ones, reducing cost and logistics problems, and building an efficient fleet, in part by reducing the number of ship classes down from the current 15 to just 5.

After a prolonged pause, Senior Defense Minister Datuk Seri Ismail Sabri Yaakob announced last month that the government has decided to resume the LCS project. In his statement, the minister explained that decision was made in order continue to support its local shipping industry, Boustead Group, and keep the jobs of approximately 8,000 workers and 400 vendors that comprise Bumiputera Small and Medium Enterprises. However, the rationale behind this decision is far broader. The RMN needs to continue with the LCS project in order to maximize its options to remain relevant and increase readiness. The LCS program would enable the navy to respond to a wide variety of challenges at sea.

First, the LCS project, which is an effort focused on “building capability base” for the RMN, is a form of response and preparedness vis-à-vis the relative threats around Malaysia’s waters. Malaysia is situated at the crossroads of east and west sea lines of communication, with the Malacca Straits acting as a major choke point. The country shares maritime borders with Indonesia, an archipelago nation, and Singapore, the only city island nation in the world. In the east, Malaysia shares water borders adjacent to North Borneo with the Philippines, another archipelagic country. In the west, the Andaman Sea is a hotspot for the influx of seaborne illegal immigrants, smuggling, and trafficking activities connecting to the Malacca Straits. The claim to Sabah by the Philippines also makes North Borneo and the Sulu Islands of the southern Philippines hotspots. And, of course, the South China Sea is contested between Vietnam, the Philippines, Brunei, Taiwan, and China. The Malaysian navy’s resources are stretched in responding to these threats, making it vital to obtain LCS.

Second, the LCS project is a fleet recapitalization effort by the government to provide efficient platforms for operational requirements at sea. Modern electronics and weapon systems, countermeasures, and quick response capabilities are important features in the modern maritime domain. Ever-changing innovations and advances in the technology of both traditional and non-traditional threats make it challenging for states to ensure that their capabilities are up to date. Modern naval ships, i.e. destroyers, frigates, and corvettes, are fitted with anti-surface, anti-submarine, air defense, and electronic warfare capabilities. Currently, existing RMN ships are aging in terms of its capabilities as well as sustainability; most of its ships are over 25 years old and are reaching a point of diminishing returns when it comes to maintenance costs. With the growing mismatch in capabilities, this procurement project is a much-needed modernization component as it can provide an advanced platform to achieve combat effectiveness that the existing RMN is lacking.

Third, as much as diplomacy has become a useful tool for nations, maintaining updated military assets is equally sensible. In today’s context, war dynamics and naval battles have changed with the advent of diplomacy, but the Westphalian system is still relevant when defending a state’s national interest. A classic example of asymmetric deterrence employed by the weak against the strong may be seen in the case of Vietnam’s efforts to deter China. Wary of China and its activities in the South China Sea, After Beijing’s placement of an oil rig in waters was claimed by Vietnam in 2014, Vietnam purchased Kilo-class submarines from Russia, a move that has forced China to recalculate its actions in disputed waters since. Vietnam has also expanded its procurement of frigates and corvettes equipped with anti-ship and anti-submarine weapons; a move was intended to protect state sovereignty. As a maritime nation, combatant platforms are necessary to address continuous challenges at sea when the current platforms are becoming obsolete.

Fourth, maritime surveillance and law enforcement are a deterrent to crime at sea, but their success requires the vigorous commitment of RMN and the Malaysian Maritime Enforcement Agency (MMEA) to assert their rights and laws of the country in the region claimed.  This enforcement has increased during the COVID-19 pandemic, where the RMN and MMEA have worked together to combat non-conventional threats in national waters. This practice of integrating civilian and military assets is common in many modern Western navies. Although the MMEA operates with a dual-task function itself, when it comes to certain aspect such as military operations other than war and search and rescue, substantive resources such as LCS are required to conduct any form of assistance operations in forward area operations (beyond Malaysia’s maritime boundaries). Due to limited capability within the MMEA, the navy is regularly called upon for support.

Fleet modernization is therefore vital not just for defending sovereignty of the country, but also conducting secondary functions such as law enforcement assistance. And if the navy fails to recapitalise the fleet, RMN capability will progressively deteriorate, and the gap between the RMN and the MMEA will close. Without major combatants such as the LCS, the navy will soon be limited to the same capabilities as the MMEA, resulting in a redundant misallocation of resources on government’s part.

The maritime domain is an important defense area for Malaysia due to the country’s geographical proximity to both eastern and the western maritime routes. According to its 2019 Defense White Paper, Malaysia is a maritime nation with continental roots. Although the government continues to fall short on funding for maritime affairs due to the pandemic, the defense and security of Malaysian waters should not be compromised. The LCS project was part of the 15 to 5 program implemented after a long research and study process by RMN. Therefore, with this vision in mind, it is only practical to continue this project for the benefit of Malaysia and the stability of the region as whole. Given time and the opportunity, the Boustead Naval Shipyard can resume the LCS project and complete at least a minimum of two ships, a feasible but still relevant increase in the RMN’s assets and capabilities at sea.

ASIA MARITIME TRANSPARENCY INITIATIVE
BY THARISHINI KRISHNAN | JUNE 8, 2021
About Tharishini Krishnan

Dr. Tharishini Krishnan is a senior lecturer at the Department of Strategic Studies and a Centre of Defence and International Security Studies (CDISS) research fellow at the National Defence University of Malaysia.

LCS project delay causing 200 vendors to fold up

 2021-04-25

Malaysia-China Insight

IPOH, April 24 — About 200 vendors and contractors have shut down following the delay in the delivery of the second littoral combat ship (LCS) two years ago, according to Pangkor assemblyman, Datuk Seri Dr Zambry Abdul Kadir.

He said the project which involved 400 vendors and since the postponement was announced, almost 50 per cent of the total vendors were affected and the issue would affect all if there was no decision made by the government or the parties concerned.

“It is a project at national level which is not involving one group. Employment opportunities, local economy and national security are all involved in the project.

“Measures by the government are crucial for the LCS project to proceed so that vendors and workers can continue their work and will not get retrenched,” he told a press conference which was also attended by several vendors of the project. Zambry said the failure in the construction of the LCS in Lumut is not only creating a controversy but the government should intervene and gave it serious attention as it is affecting many parties and local economic players. One of the vendors, Safie Tamrin said his company and other vendor colleagues are facing debts apart from revolving capital which is not giving returns due to the project delay.

“We are appealing to the government to restart the LCS project to save all parties,” he said.

It was reported in December that the Ministry of Defence had conducted an in depth investigation on the failure of the subsidiary of Boustead Holdings Bhd which is Boustead Naval Shipyard Sdn Bhd (BNS), to supply six LCS valued at RM9 billion for the Royal Malaysian Navy. Senior Defence Minister Datuk Seri Ismail Sabri Yaakob said the ministry had also conducted an investigation by reviewing the contract clauses on late delivery in the acquisition of LCS. According to him, findings of the investigation led to the issuance of the notice of Liquidated and Ascertained Damages (LAD) amounting to RM180 million in which RM80.6 million had been collected one-off  from BNS in October. According to the original plan, two of six LCS should have been delivered but as at July 31 (2020), none had been completed.

10,000 pekerja, 400 vendor terjejas projek LCS tangguh

SAIFULLAH AHMAD | | 24 April 2021 SINAR 

POH - Kerajaan diminta mencari penyelesaian terbaik bagi memastikan projek pembinaan enam Kapal Tempur Pesisir Pantai (LCS) yang tertangguh sejak lebih setahun lalu diteruskan bagi menyelamatkan kira-kira 10,000 pekerja dan 400 vendor terjejas. Ahli Dewan Undangan Negeri (ADUN) Pangkor, Datuk Seri Dr Zambry Abd Kadir berkata, penangguhan projek tersebut memberi kesan yang besar kepada pekerja dan vendor kerana sebahagian mereka sudah gulung tikar disebabkan keadaan itu.

Menurutnya, jalan terbaik bagi menyelamatkan pekerja dan vendor tersebut dengan meneruskan kembali projek pembinaan LCS itu dengan segera memandangkan ia tertangguh begitu lama."Keadaan ini memberikan kesan buruk kepada keseluruhan ekosistem dan ekonomi bukan sahaja di daerah Manjung dan Perak tetapi untuk negara. "Saya memohon kepada kerajaan untuk memberikan perhatian serius mengenai perkara ini. Dalam keadaan ekonomi yang semakin sulit kita memerlukan sokongan kerajaan," katanya kepada pemberita ketika sidang akhbar di Pejabat Yayasan Bina Upaya Darul Ridzuan, di sini pada Sabtu. Hadir sama, Setiausaha MTUC Bahagian Perak, Hamzah Jaaffar dan Pengarah Urusan Samudera Selatan Engineering Sdn Bhd, Safie Tamrin. Zambry berkata, isu tersebut pernah dikemukakan kepada Menteri Pertahanan, Datuk Seri Ismail Sabri Yaacob dan Pengerusi Boustead Berhad, Datuk Seri Mohamed Khaled Nordin bagi meminta kerajaan mempertimbangkan masalah yang berlaku. Sementara itu, Safie yang merupakan salah satu vendor yang terlibat dengan pembinaan LCS itu memaklumkan bahawa pihak vendor mengalami pelbagai kesulitan selepas lebih setahun projek tersebut tidak beroperasi.

Menurutnya, sebahagian besar mereka berdepan masalah kewangan seperti membayar gaji pekerja dan melunaskan pinjaman bank kerana penangguhan terlalu lama. Beliau berkata, sebahagian daripada mereka yang merupakan anak tempatan sudah pun gulung tikar kerana tidak lagi mempunyai sumber untuk meneruskan projek tersebut. "Jika projek ini terus ditangguh, banyak lagi masalah teknikal yang akan timbul. Sebenarnya, projek ini menggunakan teknologi tinggi bagi aset pertahanan negara sekali gus memberikan pengalaman kepada vendor dalam pembinaan kapal perang. "Kita juga sudah mengikuti lebih banyak latihan dan survei bagi projek ini. Kita sangat berharap agar kerajaan dapat mempertimbangkan untuk meneruskan projek ini bagi menyelamatkan semua pihak," katanya. Menurut Safie, daripada enam kapal yang dirancang untuk dibina, hanya dua kapal yang siap 70 peratus sebelum ditangguhkan pembinaannya sehingga kini. Pada 3 Ogos 2020, Kementerian Pertahanan mengumumkan bahawa pihaknya terpaksa menimbang untuk menamatkan kontrak syarikat kontraktor yang membekalkan enam aset Tentera Laut Diraja Malaysia (TLDM) jenis kapal LCS kerana mengalami kelewatan dalam pembinaan. Ismail Sabri ketika menggulung perbahasan usul titah Yang di-Pertuan Agong di Dewan Rakyat ketika itu berkata, sehingga 31 Julai lalu tiada satu pun daripada enam kapal LCS yang disiapkan syarikat Boustead Naval Shipyard Sdn Bhd (BNSSB). Malah menurutnya, kementerian itu juga sudah membayar RM6 bilion daripada harga kos pembinaan kapal berkenaan.

Mengikut rancangan asal, kapal pertama LCS dikenali sebagai LCS1 yang direka cipta dan dibina sepenuhnya di negara ini dijangka siap pada 2018 dan akan diserahkan kepada TLDM pada pertengahan tahun 2019 manakala kapal terakhir diserahkan pada pertengahan 2023. Pembinaan kapal LCS itu adalah selaras dengan usaha pemodenan TLDM dan mampu meningkatkan keupayaan tempur armada pasukan itu daripada empat kapal tempur kepada 10 kapal sekali gus membolehkan lebih banyak operasi dapat disempurnakan dengan lebih pantas dan berkesan.

Artikel Penuh : https://www.sinarharian.com.my/article/135278/BERITA/Nasional/10000-pekerja-400-vendor-terjejas-projek-LCS-tangguh

© 2018 Hakcipta Terpelihara Kumpulan Karangkraf

Royal Malaysian Navy Dispatches Submarine Rescue Vessel to Help Search for Indonesian Submarine

 April 23, 2021

Military Leak 

MV Mega Bakti, a submarine rescue ship of the Royal Malaysian Navy (RMN), was deployed this morning to assist in the search for a missing Indonesian submarine, KRI Nanggala, which lost contact while conducting training in the waters off the north of Bali. The Malaysian Ministry of Defence in a statement, said MV Mega Bakti set off from the Submarine Command Headquarters operations jetty in Teluk Sepanggar, Kota Kinabalu, Sabah

MV Mega Bakti is a submarine rescue ship operated by the Royal Malaysian Navy (RMN). The ship was specially designed and built by Keppel Singmarine for use in Malaysia. The ship is fitted with a double lock decompression chamber (DDC) and global positioning system intelligent buoy tracking system (GIB), and a remotely-operated vehicle (ROV). The ROV is controlled remotely by operators via a cable connected to the Mega Bakti.

During a rescue operation, the ROV is used to install the distressed submarine ventilation and depressurization system (DSVSD) at a depth of up to 400 meters. It is capable of cleaning the obstacles at the escape hatch of a submarine-in-distress (DISSUB), capturing photos and videos and sending emergency life support stores (ELSS) pods. The ELSS Pod is used as a medical aid, food and other necessities to DISSUB using the ROV.

Mega Bakti provided 12 ELSS pods capable of accommodating pressures of 65 bar. The GPS intelligent buoy is used to detect DISSUB positions stranded at sea and can detect up to 1,000 meters. The distressed submarine ventilation and depressurization system (DSVSD) is installed on DISSUB to discharge clean air and drain out contaminated air from DISSUB. The portable underwater telephone system is also used to carry out communication between Mega Bakti and a DISSUB.

Indonesia will build FRIGATE JV GERMAN SHIPBUILDING

 CNBC Indonesia

 20 April 2021 18:50

Jakarta, CNBC Indonesia - BUMN PT PAL Indonesia yang ditugaskan untuk mengembangkan kapal perang TNI AL akan melibatkan konsultan angkatan laut Jerman, MTG Marinetechnik, dan perusahaan teknik Turki FIGES AS. Hal ini untuk menyesuaikan desain kelas fregat baru yang akan dibangun untuk Angkatan Laut Indonesia.

Dikutip Janes Defence, hal tersebut telah diverifikasi bahwa Marinetechnik dan FIGES malah membantu PT PAL dengan kontrak TNI-AL untuk varian kelas Iver Huitfeldt, yang kontraknya telah ditandatangani pada April 2020.

Kelas Iver Huitfeldt memiliki bobot 6.600 ton dan didukung oleh empat mesin diesel MTU 20V 8000 M70 dalam konfigurasi gabungan diesel dan diesel (CODAD), memberikan kecepatan tertinggi sekitar 28 knot.

Untuk senjata, kapal itu dilengkapi meriam Oto 76 mm di bagian depan, sistem senjata jarak dekat (CIWS) 35 mm di bagian buritan, dan modul sistem peluncuran vertikal (VLS) untuk rudal anti-udara dan permukaan di tengah kapal.

Marinetechnik dan FIGES sedang menyesuaikan desain turunan kelas untuk persyaratan TNI AL, dan akan merekomendasikan serangkaian sensor, senjata, dan sistem tempur lainnya untuk fregat tersebut.

Indonesia memang saat ini sedang berusaha untuk memperbaharui dan menambah kekuatan alat tempurnya, terutama armada laut dan armada udara.

Kapal Iver Huitfeldt Class

Kapal buatan Denmark dengan panjang 138 m hingga 150 m. Maka jenis kapal ini adalah Iver Huitfeldt Class. Kapal ini merupakan salah satu yang terbaik di kelasnya.

Iver Huitfeldt memiliki kapasitas lebih dari 100 orang dengan dimensi panjang 138,7 meter dan lebar 19,81 meter. Muatan standar dari kapal ini sampai 5.850 ton sedangkan muatan fullnya dapat mencapai 6.645 ton.

Iver Hitfeldt dapat berlayar di lautan dengan kecepatan mencapai 30 knot dengan jangkauan 16.700 km. Artinya kapal ini dapat mengarungi lautan dari Sabang sampai Merauke pulang pergi non-stop.

Kapal ini juga dilengkapi dengan berbagai senjata canggih seperti misil SM-2 dengan jangkauan 150 km dan misil RIM-162 Evolved Sea Sparrow dengan jangkauan 50 km. Senjata canggih lainnya adalah dua senjata penembak OTO Melara 76 mm dan 35 mm Oerlikon Millennium Close-In Weapon System (CIWS).

Jenis yang terakhir merupakan yang paling canggih. Dengan Oerlikon Millennium CIWS yang memiliki kecepatan 1.000 rpm dapat menembak misil lain.

Untuk mengakuisisi Iver Huitfeldt ini membutuhkan biaya sebesar US$ 325 juta atau setara degan Rp 4,55 triliun dengan asumsi kurs Rp 14.000/US$.

Significant changes with higher risk led to Boustead privatisation lapsing, says LTAT

 5 Feb 2021

theedgemarkets.com

KUALA LUMPUR (Feb 5): Uncertainties stemming from Covid-19, the Littoral Combat Ship (LCS) project, leadership changes at Lembaga Tabung Angkatan Tentera (LTAT) and clarity of Boustead Holdings Bhd’s (BHB) rejuvenation plan led to the armed forces fund aborting its takeover plan of Boustead after eight months of consideration.

In a statement, LTAT said that upon the latest deadline to announced a plan to privatise Boustead on Feb 2, a conscious decision was made to allow the deadline to lapse.

It said this was after considering the changing circumstances surrounding the privatisation plan, which presented heightened risk towards ensuring the successful completion of the privatisation.

“We were conscious to do this in the best interest of our key stakeholders, particularly our contributors, the armed forces personnel,” LTAT said.

These changes included potential uncertainties as a result of the prolonged Covid-19 measures that could further delay the diversified conglomerate’s privatisation. Additionally, there were also further uncertainties over the key businesses of Boustead, namely banking, hotel, property and retail petroleum, LTAT explained.

LTAT also highlighted leadership changes on its side and at Boustead, which require sufficient time to review ongoing projects and initiatives.

Moreover, there was also the question of Boustead’s rejuvenation plan, which included a plan to address its debt levels, it highlighted.

As such, LTAT’s current focus is on the execution of its strategic asset allocation (SAA) framework, which was completed towards end-2020. The framework establishes the objective of better diversification of investments in its portfolio, it noted.

LTAT said that it intends to rebalance its portfolio by increasing fixed income instruments (20%), reducing real estate and private equity exposure (10% respectively), and increase the diversification of its public equity portfolio (50%) and the remaining portion in other asset classes, including money market instruments.

The fund also noted that at a later stage, it plans to diversify its investments in the international arena, like other funds in the country.

“While full implementation of the initiatives as part of the strategic transformation plan would take a few years and continues to be a work in progress, LTAT will continue to assess its options in respect of creating value from its existing key investments, including reviewing the merits of any potential value creation exercise, subject to 4/4 commercial viability to LTAT and BHB, within the boundaries of the takeover rules and relevant regulations.

"At this juncture, LTAT will continue to work closely with BHB in terms of providing support towards its 'Rejuvenating Boustead’ plan and future growth strategies,” LTAT noted.

The fund also explained that it had previously engaged in the privatisation of Boustead to protect the value of its investments, as well as to pave the way to support the potential restructuring of Boustead that was being planned.

This, it argued, would help accelerate its own strategic transformation plan, which involves capitalising on immediate high-impact initiatives as catalysts to address immediate gaps and creating value in achieving longer-term sustainability.

To recap, LTAT announced that it was considering taking Boustead private at 80 sen in May. On Feb 2, the fund announced that it was aborting the exercise.

Earnings-wise, for the nine months ended Sept 30, 2020 (9MFY20), Boustead reported a wider net loss of RM153.1 million, compared with RM14.2 million a year prior. Revenue for the nine months was 6.16% higher at RM7.79 billion, compared with RM7.33 billion previously.

As of Sept 30, 2020, its borrowings stood at RM7.7 billion.

Boustead is the main dividend income contributor to LTAT. The conglomerate was financially stressed in recent years and that affected its affordability to declare generous dividends.

Boustead has several listed entities under its belt. It holds a 20.73% stake in Affin Bank Bhd, a 57.42% stake in Boustead Plantations Bhd, a 65% stake in Boustead Heavy Industries Corp Bhd and 56.09% of Pharmaniaga Bhd.

Shares in Boustead were 2.5% or 1.5 sen lower at 58.5 sen as of 11.56am today, translating into a market capitalisation of RM1.19 billion. It had seen 2.28 million shares done.

by Surin Murugiah