• It is selling the 9.78-acre plot to Jantoco Realty Sdn Bhd (JRSB) — a wholly owned subsidiary of Harrisons Holdings (Malaysia) Bhd that is principally engaged in property investment and management

KUALA LUMPUR (Sept 23): Boustead Heavy Industries Corporation Bhd (BHIC) is selling a piece of land in Kota Kinabalu, Sabah for RM18.8 million in cash to strengthen its liquidity and cash flow position.

It is selling the 9.78-acre plot to Jantoco Realty Sdn Bhd (JRSB) — a wholly owned subsidiary of Harrisons Holdings (Malaysia) Bhd that is principally engaged in property investment and management, according to BHIC's bourse filing on Friday.

BHIC unit, Boustead Penang Shipyard Sdn Bhd, has inked a conditional sale and purchase agreement with JRSB for the disposal, which will raise net cash proceeds of RM16.7 million for BHIC, which it will use as working capital.

“The working capital for BHIC Group is mainly for day-to-day operations to support the BHIC Group’s business operations that would include payments to suppliers and consultants, salaries, professional fees and finance costs,” BHIC said.

On completion of the disposal — anticipated by the fourth quarter of this year — the group is expected to realise an estimated gain of RM6 million, net of estimated expenses.

The group added that the disposal provides an opportunity to monetise its non-core investment which is undeveloped as part of BHIC Group’s disposal initiative in its Restructuring and Rationalisation Strategy.

BHIC, which is embroiled in the RM9 billion littoral combat ship (LCS) project fiasco, slipped into the red in the second quarter ended June 30, 2022 (2QFY22), with a net loss of RM517,000, compared to a net profit of RM12.3 million in 2QFY21. Quarterly revenue fell 36.66% to RM29.87 million from RM47.15 million.

In mid-August, a declassified BHIC forensic audit report released by Parliament's Public Accounts Committee (PAC), revealed, among others, that BHIC could potentially lose RM890.22 million due to the group’s mismanagement and irregularities involving the LCS project.

BHIC shares settled unchanged at 41 sen on Friday, giving the group a market cap of RM100.49 million.

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