KUALA LUMPUR: Boustead Heavy Industries Corp Bhd (BHIC) expects to secure more orders for patrol vessels from the Government, said managing director Tan Sri Ahmad Ramli Mohd Nor.
He said the company was expected to deliver the last of six patrol vessels to the Royal Malaysian Navy next month.
“The Government will decide when it will announce the new orders. In the meantime, we are preparing ourselves. We believe that the new batch of patrol vessels will have more advanced specifications,” he told reporters after the signing ceremony between BHIC Defense Technologies Sdn Bhd and Germany’s Rheinmetall Air Defence AG yesterday. The ceremony was witnessed by Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi.
The two companies entered into a share sale agreement for the joint ownership of Contraves Advanced Devices Sdn Bhd. Under the agreement, BHIC will acquire a 51% stake in Contraves while Rheinmetall will retain the remaining 49%.
BHIC Defense Technologies is a subsidiary of BHIC while Rheinmetall is a key player in the defence and security industry with annual sales of 3.4 billion euros.
Ahmad Ramli said the 51% stake was worth about RM25mil and that the purchase consideration would be based on the net tangible assets of Contraves financial statement as at June 30, 2010.
“The joint shareholding will allow Contraves to gain access to a wider market. As we have used Contraves products in the building of our first generation patrol vessels, this agreement will increase the local content in our defence products and services,” he said.
Via the agreement, Rheinmetall will also commit more than 20 million euros over five years for the export of Malaysian manufactured defence electronics into the Rheinmetall global supply chain.
Zahid said BHIC’s acquisition was in line with the group’s strategic plan to increase the depth of support services in the defence and commercial segments, as well as to meet the needs for advances in technology not only for the navy but also other services of the armed forces.
Contraves, which is located in Malacca, recorded RM85mil sales last year. The company specialises in the fabrication of circuit boards, cable trees and electronic sub-modules. Its customers are from the automotive, plant engineering, information technology and defence technology sectors.
Earlier this month, BHIC Defence Technologies entered into an agreement with Prestige Pillar Sdn Bhd and Eurocopter Malaysia Sdn Bhd to form a joint-venture company that will undertake the maintenance, repair and overhaul activities for rotary and fixed wings aircraft through the execution of government contracts.
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