KUALA LUMPUR (Feb 16): The proposed disposal of Boustead Heavy Industries Corp Bhd (BHIC)'s 20.77% stake in the troubled Boustead Naval Shipyard Sdn Bhd (BNS) to the Ministry of Finance (Inc) for RM1 has been extended for the fifth time, this time to March 31.

The original deadline for the fulfilment of conditions precedent under the deal was Oct 3, 2023, which was first extended to Nov 1, 2023, and subsequently to Dec 1, then to Dec 31, 2023, and to Jan 31, 2024.

In a filing with the local stock exchange, BHIC said the agreement for the extension has been agreed upon by both parties as additional time is needed to fulfill the conditions precedent for the RM1 deal.

"For the avoidance of doubt, all other terms and conditions of the SSA [share sale agreement] remain unchanged," the filing read.

BHIC's disposal of shares in BNS is part of the government's plan to assume full control of the RM9.13 billion littoral combat ship (LCS) project, which BNS failed to deliver on time.

According to BHIC's previous disclosures, the divestment is contingent on meeting conditions precedent within 30 business days with the possibility of an additional 21 business days or a mutually agreed upon extended period.

Four conditions precedent must be fulfilled, one of which involves the execution of a conditional agreement for inter-company trade receivables reorganisation between BHIC and BNS. This agreement aims to settle the repayment of RM383.94 million or any other sum owed by BNS to BHIC.

Other conditions include obtaining the necessary written consent from BNS' lenders and BHIC's financiers or creditors. The deal is also subject to the completion of a due diligence review and the satisfaction of the MOF through the undertaking and completion of all required remedial actions.

Boustead Holdings currently holds a direct 68.85% stake in the remaining equity interest in BNS, with the Armed Forces Fund Board (LTAT) owning 10.38%. Notably, LTAT took Boustead Holdings private in June 2023.

Shares in BHIC remained unchanged at 49 sen, giving the group a market capitalization of RM276.49 million.