BSTEAD
Boustead Holdings Berhad
Company Background
The Sarawak government has raised its stake in Affin Bank Bhd to 31% after concluding a sale purchase agreement with the Armed Forces Fund Board and Boustead Holdings Bhd.
KUALA LUMPUR: The Sarawak state government, through its wholly-owned subsidiary, SG Assetfin Holdings Sdn Bhd, has finalised the share purchase agreement (SPA) of Affin Bank shares from Lembaga Tabung Angkatan Tentera (LTAT) and Boustead Holdings Bhd.
KUCHING: The Sarawak state government has formalised a deal with the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd to increase its stake in Affin Bank Bhd to 31.25 per cent.
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KUCHING: Sarawak has formalised a deal with the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd to increase its stake in Affin Bank Bhd to 31.25 per cent.
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KUALA LUMPUR: The signing of a sale and purchase agreement (SPA) between the Sarawak government, the Armed Forces Fund Board (LTAT) and its subsidiary Boustead Holdings Bhd is taking place on Friday.
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KUALA LUMPUR: The signing of a sale and purchase agreement between the Sarawak government, the Armed Forces Fund Board (LTAT) and its subsidiary Boustead Holdings Bhd is taking place on Friday.
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KUALA LUMPUR: The signing of a sale and purchase agreement between the Sarawak government, the Armed Forces Fund Board (LTAT) and its subsidiary Boustead Holdings Bhd is taking place on Friday.
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PUTRAJAYA: The Armed Forces Fund Board (LTAT) and subsidiary Boustead Holdings Bhd are investing RM45 million to build ten petrol stations in rural areas for easier access to subsidised fuel.
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$BSTEAD / 2771 (BOUSTEAD HOLDINGS BERHAD)
KUALA LUMPUR: Boustead Holdings Bhd’s subsidiary, MHS Aviation Bhd (MHS) and Westair Helicopters have signed a 7-year leasing agreement to bolster offshore helicopter operations in Namibia, Africa.
KUALA LUMPUR: Boustead Holdings Bhd subsidiary, MHS Aviation Bhd (MHS), and Westair Helicopters has signed a seven-year leasing agreement to bolster offshore helicopter operations in Namibia, Africa.
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KUALA LUMPUR: Lembaga Tabung Angkatan Tentera (LTAT) has dismissed the notion that its chief executive officer Datuk Ahmad Nazim Abdul Rahman's resignation is due to the delayed restructuring of subsidiary Boustead Holdings Bhd.
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KUALA LUMPUR: The restructuring of diversified group Boustead Holdings Bhd is crucial for reducing the Armed Forces Fund Board’s (LTAT) dependence on its income, said the Defence Ministry.
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The Failure of Boustead to Sell Boustead Plantation: A Troubling Precedent
The collapse of the deal where $BSTEAD / 2771 (BOUSTEAD HOLDINGS BERHAD) was to sell 33% plus 1 share of $BPLANT / 5254 (BOUSTEAD PLANTATIONS BERHAD) to $KLK / 2445 (KUALA LUMPUR KEPONG BERHAD) before the deadline has sent shockwaves through the market.
While both parties have maintained a gentlemanly demeanor, simply stating that the conditions for the strategic alliance agreement could not be met, leading to the termination of the transaction, market rumors suggest strong opposition from political figures to this deal. If true, this would represent a significant setback to Malaysia's corporate activities and future economic trajectory.
These comments reflect political interference in free economic activities, leaving the market in a state of uncertainty.
It's worth noting that Boustead Holdings does not appear to have been founded by Malays, so why the heightened sensitivity among political figures? Hopefully, these are just baseless rumors.
Prior to this divestment, due to the highly attractive acquisition price offered by KLK, which was even willing to play second fiddle to facilitate Boustead Holdings, this was a rare and beneficial proposition for the debt-laden Boustead Holdings. Hence, it seemed like a perfect match.
For this divestment activity, Boustead Holdings had to convene an extraordinary general meeting to seek shareholder approval. What's less known is that on the eve of this massive meeting, Boustead Holdings, which was in the final stages of its privatization exercise to compulsorily acquire the remaining shares of the company, managed to complete the exercise on the day before the extraordinary general meeting. As a result, on the day of the meeting, no other shareholders were eligible to attend, turning it into a one-man show, with the motion being passed without any dissenting voices.
This occurred after Boustead Holdings had delisted from the stock exchange and was carried out quietly, with only a few minority shareholders who had not yet accepted Boustead Holdings' full acquisition receiving the extraordinary general meeting notice, leaving many others in the dark about this development.
So, given the urgency displayed by Boustead Holdings in pursuing the divestment of Boustead Plantations, why did they suddenly hit the brakes and call it off? After KLK paid the deposit, it started buying BPLANT's shares in the market, acquiring approximately 3% of the shares. From this action, it's clear that KLK was not the party that called off the deal.
Now that the acquisition has failed, it has incurred some unrealized losses on its BPLANT shares. Therefore, stopping the deal doesn't seem prudent for KLK.
What's even more perplexing is that as soon as the acquisition agreement was terminated, Boustead Plantations received a letter from Armed Forces Fund Board (LTAT), expressing its intention to continue with the same acquisition proposal at the same price of RM1.55 per share.
The Armed Forces Fund Board is the parent company of Boustead Holdings. Seeing this letter, one cannot help but wonder why they didn't choose this path in the first place if they knew it would come to this? Why did they involve KLK?
While the Armed Forces Fund Board's letter stabilized the stock price, it now appears that instead of raising approximately RM1.15 billion through the divestment to address part of their debt, LTAT will need to spend another RM1.1 billion to acquire the remaining BPLANT shares. It seems like a reversal of priorities. Did they not carefully consider such a major about-face decision, or were they pressured by the government to overturn their original proposal?
Regardless of how things unfold, this transaction has become a negative example in the Malaysian stock market, serving as a warning for future corporate mergers and acquisitions.
Translated from here: https://cutt.ly/mwmtkeJ6
KUALA LUMPUR: Kuala Lumpur Kepong Bhd (KLK) ceased to be a substantial shareholder, with a deemed interest of 36.093 per cent, in Boustead Plantations Bhd (BPlant) with the termination of the strategic collaboration agreement (SCA) between KLK, Boustead Holdings Bhd (BHB), and the Armed Forces Fund Board (LTAT) on October 4, 2023.
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KUALA LUMPUR: Analysts are positive on the breakdown of Kuala Kepong Bhd’s (KLK) proposed deal with Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd to purchase a 33 per cent interest in Boustead Plantations Bhd (BPlant) for RM1.15 bilion, given BPlant’s expensive valuation, low earnings and hefty replanting costs.
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KUALA LUMPUR: Lembaga Tabung Angkatan Tentera (LTAT), Boustead Holdings Bhd (BHB) and Kuala Lumpur Kepong Bhd (KLK) have agreed not to proceed with KLK’s RM1.15 billion acquisition of a 33 per cent stake in Boustead Plantations Bhd (BPlant).
KUALA LUMPUR: Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd's (BHB) RM1.15 billion deal to sell a 33 per cent stake in Boustead Plantations Bhd (BPlant) to Kuala Lumpur Kepong Bhd (KLK) has been called off, just a day after LTAT and BHB said a final decision on the deal had not been made.
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KUALA LUMPUR: The Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd (BHB) have not made a final decision on the proposed RM1.15 billion strategic collaboration with Kuala Lumpur Kepong Bhd (KLK), which will see the entry of the company as a major shareholder in Boustead Plantations Bhd (BPlant).
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KUALA LUMPUR: The proposed sale of a 33 per cent stake in Boustead Plantations Bhd (BPlant) by the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd to Kuala Lumpur Kepong Bhd (KLK) is still on the table, according to both BPlant and KLK.
KUALA LUMPUR: Boustead Plantations Bhd (BPlant) lost RM370 million of its market capitalisation yesterday (Oct 2), after hitting a low of RM1.17 a share, as the extended deadline for major shareholders, the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd (BHB), to sell a 33 per cent, and one share, interest in the company to Kuala Lumpur Kepong Bhd (KLK), draws near.
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KUALA LUMPUR: Boustead Plantation Bhd (BPlant) lost RM370 million of its market capitalisation yesterday (Oct 2), after hitting a low of RM1.17 a share, as the extended deadline for major shareholders, the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd (BHB), to sell a 33 per cent, and one share, interest in the company to Kuala Lumpur Kepong Bhd (KLK), draws near.
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KUALA LUMPUR: Boustead Plantation Bhd (BPlant) lost RM370 million of its market capitalisation yesterday (Oct 2), after hitting a low of RM1.17 a share, as the extended deadline for major shareholders, the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd (BHB), to sell a 33 per cent, and one share, interest in the company to Kuala Lumpur Kepong Bhd (KLK), draws near.
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Trading Restrictions Imposed on Boustead Plantations Due to Share Price Decline
Trading activities involving proprietary day trading (PDT) and intraday short selling (IDSS) of $BPLANT / 5254 (BOUSTEAD PLANTATIONS BERHAD) shares have been temporarily suspended for the remainder of Monday. This suspension was triggered by a decline in the last done price, exceeding 15 sen or 15% of the reference price. The resumption of short selling under IDSS is scheduled for the following trading day, Tuesday, Oct 3, 2023, at 8.30 am," announced Bursa Malaysia in a filing on Monday.
What Led to the 15% Drop in Share Price in a Single Day?
Let's revisit the events that contributed to BPLANT's share price skyrocketing by 137.98% from its low on June 9 to its peak on August 28.
In mid-June, The Edge Malaysia reported that $BSTEAD / 2771 (BOUSTEAD HOLDINGS BERHAD) was exploring the possibility of selling its stake in BPLANT, attracting interest from several companies, including $YTL / 4677 (YTL CORPORATION BERHAD), Wilmar International, $IOICORP / 1961 (IOI CORPORATION BERHAD) , and $KLK / 2445 (KUALA LUMPUR KEPONG BERHAD). However, just a day later, on June 20, BSTEAD clarified that it had not entered into any agreement to sell its BPLANT shares. Initially, BSTEAD held a 57.42% stake in BPLANT, while LTAT owned 10.59%. Following LTAT's privatization of BSTEAD, its stake in BPLANT increased to 68%.
On August 24, it was reported that KLK was in the process of acquiring a 33% stake in BPLANT from LTAT and intended to launch a mandatory general offer (MGO) to privatize BPLANT at a price of RM1.55. This news drove BPLANT's share price to a record high of RM1.37 on August 23.
On September 11, KLK, BSTEAD, and LTAT agreed to extend the cut-off date for their strategic collaboration agreement (SCA) to September 22. Additionally, on September 18, KLK acquired an additional 1.34 million BPLANT shares from the open market. The disposal of 33% of BPLANT shares by BSTEAD also received support from the Minister of Defense.
However, the cut-off date for the proposed disposal of a 33% stake in BPLANT by LTAT has been extended for the second time, now set for October 6.
So, is the repeated extension of these agreements the reason for the share price drop, as investors may be uncertain about the deal's success? Or could the share price decline be related to KLK's open-market share disposal due to pessimism about the deal? Share your thoughts below.
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$BSTEAD / 2771 (BOUSTEAD HOLDINGS BERHAD)
KUALA LUMPUR: Boustead Holdings Bhd’s (Boustead) move to dispose of a 33 per cent stake in Boustead Plantations Bhd (BPlant) to Kuala Lumpur Kepong Bhd (KLK) was necessary to resolve its cash flow problem and as debt settlement before the end of its financial year on Dec 31, 2023.
KUALA LUMPUR: Kuala Lumpur Kepong Bhd's (KLK) proposal was the "most financially appealling and cleanest" among those that bid to become Boustead Holdings Bhd's strategic partner for the privatisation of Boustead Plantations Bhd (BPlant).
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KUALA LUMPUR: Not long after the more than RM700 million privatisation of conglomerate Boustead Holdings Bhd was completed, the Armed Forces Fund Board (LTAT) unveiled its SUSTAINABLE25 blueprint in mid-July.
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KUALA LUMPUR: Not long after the more than RM700 million privatisation of conglomerate Boustead Holdings Bhd was completed, the Armed Forces Fund Board (LTAT) unveiled its SUSTAINABLE25 blueprint in mid-July.
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KUALA LUMPUR: Kuala Lumpur Kepong Bhd (KLK) has agreed with Boustead Holdings Bhd and the latter’s parent Armed Forces Fund Board (LTAT) on Sept 22 being the cut-off date for their strategic collaboration agreement (SCA) involving Boustead Plantations Bhd.
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