KUALA LUMPUR (May 21): A subsidiary of listed company Boustead Holdings Bhd, namely Boustead Naval Shipyard Sdn Bhd (BNS), will know on June 2 whether the High Court here will grant leave for a restraining order against its creditors and allow the firm to enter into a scheme of arrangement for more than RM1 billion of its debts.
High Court Judicial Commissioner Liza Chan Sow Keng fixed the date after hearing submissions on the issue from legal representatives of Boustead and the 15 financial institutions or creditors on Wednesday evening. BNS was represented by Lee Shih and Nathalie Ker of Lim Chee Wee Partnership.
BNS faced financial difficulties following a winding-up petition filed by MTU Services (Malaysia) Sdn Bhd in July over an alleged debt of RM56.04 million. On March 29, the winding-up petition was struck out.
BNS in October 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 the 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. Besides MTU Services, others 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.
Also included are Bank Pembangunan Malaysia Bhd, AmBank Islamic Bhd, AmBank (M) Bhd, MTU Services, Affin Hwang Investment Bank Bhd, Bank Muamalat Malaysia Bhd, Affin Bank Bhd, Bank Kerjasama Rakyat Malaysia Bhd, Malayan Banking Bhd (Maybank) and Kuwait Finance House (Malaysia) Bhd.
In a bourse filing, Boustead, which is 59.44%-owned by Lembaga Tabung Angkatan Tentera (LTAT), announced that BNS had applied with the Kuala Lumpur High Court pursuant to Sections 366 and 368 of the Companies Act 2016 for, among others, the following orders:
- An order pursuant to Section 366(1) of the act to summon meetings of the creditors of BNS or any class of them for the purpose of considering and, if deemed appropriate, to approve with or without modification a proposed scheme of arrangement and compromise between BNS and its creditors; and
- A restraining order pursuant to Section 368 of the act whereby, among others, all proceedings and/or further proceedings and/or future proceedings in any action or proceedings against BNS and/or its assets, including but not limited to court, winding-up and arbitration proceedings as well as any intended or future proceedings (“the restraining order”). The restraining order excludes the financial institution creditors of BNS.
To recap, in December 2011, BNS received a letter of award from the Ministry of Defence to design, construct, equip, instal, commission, integrate, test and conduct trials and deliver six Second Generation Patrol Vessels or Littoral Combat Ships (Frigate Class) (LCS) at a contract value of RM9 billion.
The LCS contract was originally slated for completion in 2019, and is hanging in the balance, with a large amount of funds already drawn down but none of the vessels completed.
