Malaysian government acquires stake in naval shipbuilder

The first-in-class LCS was launched in August 2017 but the vessel is not expected to be delivered to the Royal Malaysian Navy by November 2024. (Royal Malaysian Navy)

Malaysian corporation Boustead Heavy Industries has agreed to sell a major stake in its naval shipbuilding business, Boustead Naval Shipyard (BNS), to the government.

The proposed transaction – valued at a nominal MYR1 (USD0.21) – is intended to support BNS' completion of the troubled Maharaja Lela-class littoral combat ship (LCS) programme for the Royal Malaysian Navy (RMN).

Boustead Heavy announced the share sale in a filing to the Bursa Malaysia stock exchange on 22 August. The sale is expected to be finalised by the end of 2023.

The filing said the share agreement features the sale of 27 million shares in BNS – representing Boustead Heavy's entire 20.77% stake in BNS – to Ocean Sunshine, which is indirectly owned by a Malaysian government entity known as Minister of Finance (Incorporated).

Other BNS shareholders include Boustead Holdings – the parent of Boustead Heavy – which owns nearly 69% of BNS shares, and the Malaysian Armed Forces Fund Board, a pension fund for members of the Malaysian military, which holds the remainder.

The filing said the share sale is aligned with a government intention to eventually acquire 100% shares in BNS and ensure the completion of the LCS programme. It said the government's plan to acquire the entire stake in BNS was communicated to Boustead Heavy in May 2023.