KUALA LUMPUR (June 2): The High Court today granted Boustead Holdings Bhd’s subsidiary Boustead Naval Shipyard Sdn Bhd (BNS) a three-month restraining order and leave to proceed with a scheme of arrangement with its creditors.
The order was made by Judicial Commissioner Liza Chan Sow Keng following a Zoom hearing where the court made the following orders:
- BNS creditors are to meet, consider and, if thought fit, approve the scheme of arrangement between BNS and the scheme creditors
- a restraining order on proceedings against BNS or its assets for three months
- former Federal Court judge Tan Sri Aziah Ali be approved to act as a director of BNS, pursuant to Section 368(2)(d) of the Companies Act 2016, and
- the court appoints an approved liquidator to assess the viability of the scheme proposed for the compromise or arrangement, with the liquidator preparing a report pursuant to Section 367(1) of the Companies Act 2016 for submission to BNS, which will be tabled at the meeting of scheme creditors.
BNS was represented by Lee Shih and Nathalie Ker from Lim Chee Wee Partnership.
Last month, theedgemarkets.com reported that Chan was going to deliver the court's decision today.
The orders given by the High Court today were obtained as part of BNS’s overall restructuring and rehabilitation plan by way of a proposed scheme of arrangement with its creditors.
The company has appointed Ernst & Young PLT as its financial advisor to assist in the proposed scheme of arrangement.
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 had in October last year 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.
Boustead, which is 59.44%-owned by Lembaga Tabung Angkatan Tentera (LTAT), in a bouse filing had announced that BNS had applied with the Kuala Lumpur High Court pursuant to Sections 366 and 368 of the Companies Act 2016 for:
- 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.
BNS had in 2011 received a letter of award of RM9 billion from the Defence Ministry to design, construct, equip, install, commission, integrate, test and conduct trials and deliver six Second Generation Patrol Vessels or Littoral Combat Ships (Frigate Class) (LCS).
Those vessels are supposed to be completed by 2019, but have not been completed until today despite large amounts of funds are said to be drawn down.