The armed forces pension fund, which currently holds a 59.4% interest in Boustead, is expected to fork out a total of RM703.2 million at 85.5 sen per share.
In a statement today, LTAT said the offer is conditional upon the finance ministry’s approval on Bank Negara Malaysia’s (BNM) recommendation and approval under Section 87 of the Financial Services Act 2013 (FSA) and Section 99 of the Islamic Financial Services Act 2013 (IFSA).
BNM would also have to provide a waiver to comply with Section 110 of the FSA and Section 122 of the IFSA in relation to the requirement for LTAT and/or its nominated company to be approved as a financial holding company of Affin Bank Bhd, and other relevant licensed entities.
In its filing with Bursa Malaysia today, Boustead said LTAT does not intend to maintain its listing status and will not be taking any steps to address any shortfall in the public shareholding spread of BHB in the event it does not meet the public spread requirements after the closing date.
LTAT said it currently does not have any plan to dismiss or make redundant any of the BHB employees as a direct consequence of the offer.
“The offer will not result in a mandatory offer by LTAT to acquire all the remaining voting shares in [BHB subsidiaries] Affin Bank Bhd, Boustead Plantations Bhd, Boustead Heavy Industries Corp Bhd and Pharmaniaga Bhd that are not already held by LTAT, whether direct or indirect, in view that LTAT already has statutory control over [Boustead],” it added.
Musical chairs at Boustead, Pharmaniaga
In a separate announcement today, BHB appointed Ahmad Nazim Abd Rahman as its new chairman. He was previously a director at BHB.
Nazim is also the CEO of LTAT, and prior to that, served as MD for Southeast Asia of UAE-based investment firm Allied Investment Partners, and Pelaburan Mara Bhd CEO from 2013 to 2018.
He is currently a non-independent non-executive director of Boustead Heavy Industries Bhd, and chairman of Boustead Naval Shipyard Sdn Bhd and Boustead Petroleum Marketing Sdn Bhd.
Over at Pharmaniaga, Izaddeen Daud was appointed as its new non-independent non-executive chairman effective Feb 22.
He previously served on Pharmaniaga’s board as non-independent non-executive director since March 2021, and presently serves as BHB’s group CEO, among several other roles within the group.
Pharmaniaga also announced the resignation of Zulkarnain Eusope and Zulkifli Jafar from the board, with Zulkarnian redesignated as Pharmaniaga’s CEO and Zulkifli as its deputy CEO.
BHB, which owns 52% of Pharmaniaga, was dragged into the red as its financials suffered a RM402.3 million net loss for its fourth quarter ended Dec 31, 2022 from a net profit of RM78.6 million in Q4 FY2021.
This was due to Pharmaniaga’s RM522.3 million provision of slow-moving Covid-19 vaccine inventory and a write-down in goodwill of its Indonesian manufacturing units of RM 50.3 million. This led to the pharmaceutical company’s massive net loss of RM644.4 million in Q4 FY2022.
As a consequence, Pharmaniaga fell under the Practice Note (PN17) classification for financially distressed companies.
Boustead’s the talk of the town
From LTAT’s perspective, its plan to take BHB private makes perfect sense given that Pharmaniaga and 68.85%-owned Boustead Naval Shipyard (BNS) have been in the news for all the wrong reasons.
BNS was awarded a RM9.13 billion littoral combat ship (LCS) contract to build six ships in 2011 by the government and was scheduled to deliver the vessels in stages from April 2019 to 2023.
A contract was eventually signed in July 2014, and BNS would build the ships with help from French naval company DCNS beginning 2015.
However, only one ship was 44% completed as of last August and four others were between 16% to 35% completed, and no work had commenced on the other ship. More than eight years on, none of the ships have been delivered to the navy.
The announcement this week that Pharmaniaga suffered a net loss of RM644.4 million in Q4 FY2022 and was classified as a PN17-status company could have been the straw that broke the camel’s back.
In a separate filing today, the group requested for suspension in the trading of its shares pending the release of an announcement.
At the mid-day break, BHB closed three sen or 4% higher at 66 sen, valuing the group at RM1.32 billion. Trading of its shares will resume tomorrow at 9am.