KUALA LUMPUR: Boustead Heavy Industries Corporation Bhd (BHIC) has received its shareholders' approval to sell a 51 per cent stake in Contraves Advanced Devices Sdn Bhd (CAD) at an extraordinary general meeting (EGM) today.
BHIC disposed 2.55 million shares for RM54 million as part of its strategic realignment to chart a path of growth and profitability to deliver optimum value to its shareholders.
BHIC chief executive officer Feroz Razi Ramli said the disposal provides opportunity to monetise investment in CAD and with capital to venture into new business opportunities in defense and commercial segments when they arise.
"The sale will further strengthen the group's financials following the RM417 million debt settlement exercise in early 2024 and facilitate the strategic realignment of its business moving forward," he added.
CAD is principally involved in the manufacturing of industrial printed circuit board assemblies and box-build assemblies and in the production of modules, electronic subassemblies, antenna and electronic time relays for the automotive industry.
German systems supplier to the defence industry, Rheinmetall AG owns a 49 per cent stake in the company.
BHIC's wholly owned subsidiary BHIC's Defence Technologies Sdn Bhd, through which the shares were held, reached an agreement with Rheinmetall for the disposal of the shares following negotiations initiated in December 2023.
The development aligns with BHIC's earlier disposal of its 20.77 per cent equity in Boustead Naval Shipyard Sdn Bhd (now known as Lumut Naval Shipyard) in April 2024 which facilitated the shipyard's takeover by the Ministry of Finance Inc.
Boustead Holdings Bhd group chief executive officer Izaddeen Daud said the shareholders' nod reflects their confidence in BHIC to advancing the agenda of reinventing the company.
@The disposal of non-core assets like CAD will enable BHIC to pursue its strategic objective of becoming the preferred strategic partner in defense and security, as well as in attaining sustainable value creation," he said.