Malaysia’s Armed Forces Pension Fund seeks to privatise Boustead

The Petronas Towers peek through palm trees. Kuala Lumpur, Malaysia.

Malaysia’s armed forces pension fund is considering a proposal to privatise Boustead Holdings Bhd, where it owns 59 per cent stake. It is looking at an indicative price of 80 sen per share.

The proposal is subject to, among others, the finalisation of the structure, the requisite funding and the required regulatory approval(s), Boustead said in a regulatory filing on Friday.

“If Lembaga Tabung Angkatan Tentera (LTAT) decides to proceed with the proposal, LTAT expects to propose an offer price of 80 sen per ordinary share in Boustead. This offer price is indicative only and non-binding. The final offer price in relation to the Proposal (if undertaken) is subject to finalisation by LTAT,” the company said.

The indicative price of 80 sen is 27 per cent higher than its closing price of 63 sen on Thursday.

The company said it wishes to highlight that the press notice issued by LTAT “does not amount to a firm intention by LTAT to undertake the proposal”. Accordingly, there can be no certainty that LTAT will proceed with the proposal, it added.

“Shareholders are advised to exercise caution and seek appropriate advice when dealing in Boustead Holdings Bhd shares since there is no certainty that LTAT will proceed with the proposal,” it said.

At this juncture, the company has not received any offer relating to the proposal from LTAT or any other parties, it added.

The privatisation proposal comes as LTAT is undergoing the implementation of the first phase of its transformation journey, which includes realigning investment strategies. The fund reported a lower net profit of RM91.7 million in 2019 compared to RM221 million in 2018. Meanwhile, Boustead’s net loss widen to RM1.28 billion in 2019 from a net loss of RM554.3 million a year ago.

Listed on Bursa Malaysia Main Market, Boustead is a conglomerate with businesses in plantation, property, pharmaceutical, heavy industries and financial services. Boustead & Co was listed on Malayan Stock Exchange in 1961, before assuming its name to Boustead Holdings Bhd in 1966. LTAT acquired controlling interest in Boustead in 1990.

As at Dec 31, 2019, LTAT’s assets under management (AUM) stood at RM9.48 billion, according to earlier reports.

Bloomberg first reported the news on Wednesday.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.