BSTEAD 2771 BOUSTEAD HOLDINGS BERHAD Naval Shipyard given extension of restraining order until June 2

 BSTEAD 2771  BOUSTEAD HOLDINGS BERHAD Naval Shipyard given extension of restraining order until June 2

KUALA LUMPUR (April 21): It appears that stars have aligned for financially-stressed Boustead Naval Shipyard Sdn Bhd (BNS), which has failed to deliver six littoral combat ships (LCS) to the Royal Malaysian Navy under the RM9.1 billion contract awarded in 2011.

BNS, a subsidiary of Boustead Holdings Bhd controlled by the Lembaga Tabung Angkatan Tentera, succeeded in getting the High Court to extend the restraining order until June 2, pursuant to a scheme of arrangement and leave to hold the court-convened meeting up to June 2.

Judicial Commissioner Liza Chan Sow Keng granted the extension, after the court took into account the Cabinet's position to continue with the littoral combat ship project.

To recap, the Cabinet, which met on Wednesday and was chaired by Prime Minister Datuk Seri Ismail Sabri Yaakob, unanimously agreed to proceed with the project to procure the LCS.

Senior Defence Minister Datuk Seri Hishammuddin Tun Hussein was quoted by the media saying the decision was made after taking into consideration two key factors, namely the LCS assets are much needed by the Royal Malaysian Navy (RMN) as well as there being 400 vendors involved in the project, with a financial expenditure of over RM4 billion.

Lee Shih and Nathalie Ker from Messrs Lim Chee Wee Partnership appeared for Boustead Naval Shipyard.

This is not the first time that the restraining order was extended.

In January, Chan granted a three-month extension of the restraining order to BNS from Dec 2 last year to March 2.

Prior to that, on June 2, 2021, she had granted BNS a three-month restraining order and leave to proceed with a scheme of arrangement with its creditors. That same day, the court also granted a restraining order on proceedings against BNS or its assets for three months after a winding-up petition by MTU Services (Malaysia) Sdn Bhd.

BNS’ financial stress mounted in July 2020 following a winding-up petition filed by MTU Services over an alleged debt of RM56.04 million.

On March 29, 2021, the winding-up petition was struck out.

Prior to that, BNS had in October 2020 obtained an ad interim restraining order to restrain its scheme creditors from initiating legal proceedings against the company.

The ad interim restraining order will not restrain or stay the continuation of legal proceedings brought by MTU Services and Ingat Kawan (M) Sdn Bhd.

Since then, it is understood that other creditors have intervened in the ongoing court proceedings over the scheme of arrangement.

The creditors include Contraves Sdn Bhd, Axima Concept SA, Contraves Advanced Devices Sdn Bhd, Contraves Electrodynamics Sdn Bhd and Tyco Fire, Security & Services Malaysia Sdn Bhd, as well as iXblue SAS, iXblue Sdn Bhd and Protank Mission Systems Sdn Bhd.

Institutional creditors are Bank Pembangunan Malaysia Bhd, AmBank Islamic Bhd, AmBank (M) Bhd, Affin Hwang Investment Bank Bhd, Bank Muamalat Malaysia Bhd, Affin Bank Bhd, Bank Kerjasama Rakyat Malaysia Bhd, Malayan Banking Bhd and Kuwait Finance House (Malaysia) Bhd.

Read also: Cabinet unanimously agrees to proceed with littoral combat ships procurement — Hishammuddin

KL High Court grants Boustead Naval Shipyard a further three-month extension of restraining order

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