KUALA LUMPUR, Feb 5 — The Armed Forces Fund Board (LTAT) said it allowed the extended February 2 deadline on the proposed privatisation of Boustead Holdings Bhd (BHB) to lapse, in the best interest of its key stakeholders, particularly the contributors.
It described the course of action as a “conscious decision”, considering the changing circumstances surrounding the privatisation plan, which resulted in heightened risks towards ensuring the successful completion of the exercise.
“These changing circumstances include potential uncertainties as a result of prolonged Covid19 measures that could further delay the privatisation journey; further uncertainties to the key businesses of Boustead Group impacted by the pandemic, among them Banking, Hotels, Property and Retail Petroleum.”
LTAT also cited ongoing uncertainty surrounding the Littoral Combat Ship (LCS) project; leadership changes/transition both at LTAT and Boustead, which requires sufficient time to review ongoing projects/initiatives; and clarity on Boustead Group’s rejuvenation plan, including addressing its debt levels.
“While the privatisation may not be timely at this juncture, the lapse in deadline will enable us to review and reassess our strategies as part of our intention to fully assess and further fine-tune LTAT’s five-year strategic transformation plan,” it said.
It said LTAT remained steadfast in continuing its transformation journey towards becoming a world-class pension fund.
“In line with our contributors’ retirement objectives, LTAT shall remain true to its nature as a long-term investor and a custodian of patient capital, hence we shall not hesitate to be judicious in carrying out our investment strategies,” it said.
Moving forward, it said LTAT’s current focus is on the execution of its strategic asset allocation (SAA) framework that was completed towards the tail end of 2020, which sets long-term targets to deploy capital towards better diversification of the statutory body’s portfolio of investments.
In this regard, LTAT intends to rebalance its portfolio by increasing fixed income investments (20 per cent), reducing real estate and private equity exposure (10 per cent each), increase the diversification of its public equity portfolio (50 per cent) and the remaining in other asset classes including money market instruments.
At a later stage, LTAT said it also intends to commence its plan for international diversification similar to other peer institutions.
It will also continue to assess its options in respect of creating value from its existing key investments, including reviewing merits of any potential value creation exercise, subject to commercial viability to LTAT and BHB, within the boundaries of the Take-over Rules and relevant regulations.
“At this juncture, LTAT will continue to work closely with BHB in terms of providing support towards its ‘Rejuvenating Boustead’ plan and future growth strategies,” it added.
— Bernama
