PETALING JAYA: Boustead Holdings Bhd made a slew of announcements yesterday ranging from a venture into planting and extracting algae oil to the disposal of a parcel of land located along Jalan Cochrane and the resignation of one of its board members.
Yesterday, the loss-making conglomerate announced its venture into algae oil that would see Boustead partnering with Next Generation Oil Sdn Bhd for the development of large-scale algae plantations to meet the increasing global demand for biofuels.
Boustead managing director Datuk Seri Mohammed Shazalli Ramly said the group was aiming to improve its market capitalisation in the next three years through its venture in a new energy sector as part of its efforts to address a sustainable future and protect natural resources.
“Our aim is big, through this reinvention we need to help improve the market capitalisation of Boustead Holdings from what it is today at about RM1.2bil to something bigger within the next three years
“That is a set target that we have put for the group by reinventing Boustead to embrace fundamental things of change. We need to change the way it thinks and the way it does its businesses, ” he said.
“Reinventing Boustead involved true conscience in sustainability to protect our natural resources.
“Within this DNA we have built pillars to firmly move forward with the rest of our core businesses such as pharmaceuticals, trading and plantation, and synchronise them by embracing technology and digitalisation, ” Shazalli said during his opening speech to announce Boustead’s partnership with Next Generation Oil Sdn Bhd yesterday.
Boustead signed a memorandum of understanding (MoU) with Next Generation Oil Sdn Bhd to “co-create” a new economic ecosystem with renewable algae biofuel technology.
The MoU, Boustead said, would pave the way for the group to monetise its current land assets through higher yield products.
“As part of our new strategy, the renewable energy sphere offers a sustainable revenue stream over the medium and long term for the group, ” Shazalli said.
He declined to comment when asked about the estimated investment cost for Boustead to take on the algae planting project. “It is still in the early stage of discussion, ” he said.
Shazalli pointed out that the algae biofuel initiative would be supported by Boustead Plantations Bhd’s ample land bank to build the algae plantation facilities, which fits seamlessly into the group’s plan to create an alternative or complementary activity for its plantation subsidiary.
“Apart from several international oil majors from whom the Next Generation Group has secured offtake agreements for crude algae oil, we also have a subsidiary Boustead Petroleum Marketing Sdn Bhd, which operates about 400 BHPetrol stations nationwide that could potentially be the future local offtake of the algae feedstock, ” he said.
Boustead, a 59.43%-owned subsidiary of Lembaga Tabung Angkatan Tentera (LTAT), has been selling its assets to help shore up its balance sheet and pare down its huge debt, which stood at RM7.5bil.
The latest asset-disposal exercise by Boustead was announced yesterday involving the conglomerate’s selling a parcel of land located along Jalan Cochrane in the city centre for RM233.4mil to Sunway Bhd.
Boustead told Bursa Malaysia that the estimated gain from the disposal of the 6.6-acre plot of land was about RM54.1mil.
“The proposed disposal also allows Boustead to strengthen its liquidity and cash flow position by raising total net cash proceeds of approximately RM213.8mil net of estimated expenses, which will be utilised for repayment of bank borrowings and working capital, ” it said.
Meanwhile, in a separate announcement, Boustead announced the resignation of its director Datuk Abdul Hamid Sheikh Mohamed to pursue other interests.
Hamid is currently the executive director of Symphony House Sdn Bhd, a position he had held from 2003 until the present.
He also sits on the boards of several public-listed companies such as MMC Corp Bhd and Maybank Investment Bank Bhd.