LTAT said no material development to privatize Boustead


Once the high performer in the local bourse, Boustead Holding recent financial result reveal a gloomier outlook to the company’s future.

According to the financial report announced by Boustead in June, the company registered a loss after tax of 66.1 million ringgit. That would be the 4th consecutive loss for the company.

While the share price has plunged to 0.34 cent per share in March, its current share price is currently at a healthier state.
The share price of the company remained at 0.60 cent per share level in September. Part of the support for the share come from the news that the Lembaga Tabung Angkatan Tentera (LTAT) is going to privatized Boustead.

It is worth mentioning that LTAT is the single largest shareholder of the company, holding around 59.4% of Boustead share. Besides, LTAT also holding the 4 companies that hold by Boustead – Affin Bank Bhd, Boustead Plantations Bhd, Boustead Heavy Industries Corp Bhd (BHIC) and Pharmaniaga Bhd.

On 27th August, LTAT confirmed that it has received a nod from Bank Negara for the privatization plan. According to Boustead, the indicative price for the takeover is at 80 cent per share. Using 0.65 share as reference, it meant an 20% premium to the price.

Having said so, LTAT recently said that there has been no material development on the proposal to take the 59 per cent-owned Boustead Holdings Bhd private.

With Covid-19 threaten the global economy development, the recovery path for Boustead is expected to be tough.

Selling asset might be a viable solution to the need of cash, but the true challenge to the company is to make Boustead profitable again. With Bousted in debt-ridden condition, what used to be the cash cow of LTAT has now turned into drag.