KUALA LUMPUR (Dec 6): The Armed Forces Fund Board, or Lembaga Tabung Angkatan Tentera (LTAT), clarified that its restructuring plan has not been cancelled, but refined to address current challenges and leverage new opportunities.
The refined strategy aims to reduce LTAT’s portfolio exposure in its Boustead-Affin investments to 35%, an improvement from the 50% target under the earlier plan, the armed forces fund board said in a statement.
This adjustment aligns with recommendations from the Public Accounts Committee (PAC) to mitigate overconcentration risks and ensure financial resilience, it said.
According to the PAC report on LTAT-Boustead restructuring released during the current Parliament session, LTAT had invested RM5 billion, compared to its assets under management of RM11.5 billion at end-2023, into Boustead Holdings Bhd and its subsidiaries.
LTAT took Boustead Holdings private in 2023, which costed the fund RM1.15 billion, after a plan to rope in Kuala Lumpur Kepong Bhd (KL:KLK) as a strategic partner was axed.
The fund also owns 22% direct stake in Affin Bank Bhd (KL:AFFIN), following Boustead's exit upon disposal of a total of 26.96% stake to SG AssetFin Holdings Sdn Bhd (SAH). Although Affin Bank's Bursa Malaysia filing did not indicate the value of the transaction, Bloomberg data showed that the shares were sold in eight tranches for RM1.78 billion.
In the Friday statement, LTAT also addressed specific transactions, including denying ownership of land in Batu Kawan and refuting claims of its disposal.
"LTAT firmly clarifies that LTAT along with its group of companies do not own any land in that area, and the statement concerning its disposal is false and misleading."
Additionally, Eco World Development Group Bhd's (KL:ECOWLD) joint venture with Boustead Properties Bhd was selected for a Semenyih land project through a transparent tender process, with the proceeds earmarked for Boustead Plantations Bhd’s oil palm replanting programme, it added.
The land project refers to a RM742 million cash deal for EcoWorld's 81% owned unit Mutiara Balau Sdn Bhd to acquire 10 plots of land in Semenyih for a new, RM4.6 billion mixed project. Boustead Properties has a minority stake in Mutiara Balau, LTAT said.
The clarification comes a day after the PAC, during a briefing to the lower house of Parliament, questioned whether LTAT had adopted an asset liquidation strategy under its restructuring plan to generate cash flow and reduce debt.
Halimah Ali (Perikatan Nasional-Kapar), one of the 14 members of the bipartisan committee, cited two transactions — the disposal of land to EcoWorld by Boustead Properties and the proposed sale of farmland owned by Boustead Plantations to Ideal Properties Bhd — and criticised these moves as being conducted discreetly without public knowledge.
Halimah expressed concern that while such measures might address LTAT's immediate financial issues, they represent a "short-term" solution that could affect the long-term value of its assets. She also noted the absence of a replacement for LTAT's strategic plan, which was halted 10 months ago.
On Friday, LTAT emphasised that its asset divestment initiative is a strategic effort, not a short-term fix.
It added that all disposals are carried out transparently and with integrity, aiming to generate optimal value and reinvest in high-value, sustainable assets to ensure the financial resilience needed to safeguard members' welfare in the long term.
LTAT reaffirmed its commitment to transparency and accountability, adding that the refined restructuring plan will be presented to the Cabinet for a comprehensive review and approval.
Under the restructuring plan that is now under review, Boustead, which currently operates as a conglomerate with shareholdings in multiple operations from fuel retailer to plantation and pharmaceutical, will instead operate as a real estate business.
The intention is also for LTAT to keep exposure to Boustead’s fuel retailer arm Boustead Petroleum Marketing Sdn Bhd, plantation arm Boustead Plantations and listed pharmaceutical outfit Pharmaniaga Bhd (KL:PHARMA).