KUALA LUMPUR: Contraves Advanced Devices Sdn Bhd (CAD), a unit of Boustead Heavy Industries Corp Bhd (BHIC) has received a letter of award (LoA) from Boustead Holdings Bhd’s subsidiary Boustead Naval Shipyard Sdn Bhd (BNS) for a contract worth RM203.8 million.

The LoA is for a contract to procure, engineer and integrate the DCNS SETIS Combat Management System, a combined integrated communication system and communications ESM system.

In a filing with Bursa Malaysia yesterday, BHIC said the contract would be implemented over 10 years.

The LoA was issued in relation to a contract for second-generation patrol vessels or Littoral Combat Ships, which was awarded to BNS by the government. The contract for the delivery of the six vessels was valued at RM9 billion.

The awarded works are expected to have a positive impact on BHIC’s earnings for several financial years as it is a long-term contract, it said, adding that the contract constituted a recurrent related-party transaction as BNS is an associate of BHIC.

Both BHIC and Boustead Holdings have a common shareholder in Lembaga Tabung Angkatan Tentera.

Contraves Electrodynamics Sdn Bhd, a wholly-owned subsidiary of CAD, has accepted a supplementary LoA to undertake the procurement, engineering and integration of additional equipment and facilities for the DCNS SETIS Combat Management System valued at RM305 million, which would be implemented over 10 years.

This article first appeared  in The Edge Financial Daily, on Oct 3, 2012.