KUALA LUMPUR: Boustead Heavy Industries Corp Bhd (BHIC), a subsidiary of Boustead Holdings Bhd, has bagged a €63.08 million (RM263 million) contract to supply combat systems equipment and related services for the government’s littoral combat ships programme.

In a filing with Bursa Malaysia yesterday, BHIC said a letter of award was received on Tuesday by its joint venture (JV) firm Contraves Advanced Devices Sdn Bhd (CAD) from associate Boustead Naval Shipyard Sdn Bhd (BNS) for the proposed project.

CAD is a 51%-to-49% JV between BHIC Defence Technologies Sdn Bhd, a wholly-owned subsidiary of BHIC, and Rheinmetall Air Defence AG.

BHIC said the awarded works are in relation to the contract for the work to build and deliver six units of second-generation patrol vessels with littoral combat capabilities (frigate class), which was earlier granted to BNS by the government.

BHIC said the awarded works are expected to have a positive impact on its earnings for the financial year ending Dec 31, 2014, and subsequent years given the long-term nature of the contract.

“The awarded works constitute a recurrent related party transaction for which a shareholder mandate was obtained at BHIC’s annual general meeting on April 3, 2014, and are expected to have a positive impact on the earnings of the group for the financial year ending Dec 31, 2014, and thereafter,” said BHIC in a separate statement.

This article first appeared in The Edge Financial Daily, on November 13, 2014.