Malaysian Mutual Funds Take Private Account of Boustead Assets

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Malaysia ‘s military pension fund considers alternatives for its majority interest in Boustead Holdings Bhd like taking private conglomerate, said people with knowledge of the matter.

Lembaga Tabung Angkatan Tentera, which owns a 59 per cent stake in Boustead, has been authorised for a loan to finance the transaction, one of the people. Boustead ‘s stock, an investment company with investments covering real estate, financial services, plantations and engineering, grew to 18.6 percent on Thursday (May 28) and hit their maximum point since March 9.

Boustead’s proposed investment arrives as LTAT seeks to restructure itself in the face of efficiency problems that precede the coronavirus crisis. LTAT is consulting on the turnaround with advisors, the people added.

Discussions are only in the early stages, and the people said that LTAT may still agree not to continue with the deal. Boustead and LTAT officials did not immediately respond to requests for comment.

The fund was established in 1972 to provide retirement and other benefits for Malaysian military veterans. Members are expected to pay 10 per cent of their monthly earnings to the superannuation scheme, although the government pays 15 per cent according to its website.

According to a survey by the state news agency Bernama on its financial performance for 2019, LTAT has around RM9.5 billion (S$3.1 billion) of assets under administration.

His stake in Boustead and a 35 per cent stake in Affin Bank Bhd are among the largest holdings of the armed forces fund, according to data compiled by Bloomberg. 2019 was a difficult year for the fund, because neither company paid a dividend.

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