Malaysia: BN Shipyard Secures $2.7b Navy Gig

Boustead Naval Shipyard Sdn. Bhd. (BN Shipyard), a subsidiary of Boustead Heavy Industries Corporation Berhad (BHIC), has received an amended Letter of Acceptance (Amended LOA) from the Ministry of Defence of Malaysia to build six second-generation patrol vessels.

Under the 10-year contract, the shipyard will design, construct, equip, test and deliver six patrol vessels with combatant capabilities (Littoral Combatant Ships, LCS) for the Royal Malaysian Navy. The value of the contract is estimated to be around $2.78 billion (RM9.0 billion).

The confirmation of the contract came from the Ministry on October 1st. The Ministry also confirmed it will pay further advance payment of RM700 million ($216.3 million) in stages to BN Shipyard.

“The contract will have material effect on the earnings of the company for the financial year ending 31 December 2013, and will contribute positively to the future earnings of the BHIC Group,” said BHIC in the filling.

Boustead Naval Shipyard is a one-stop centre for defense and maritime needs. Covering an area of 46 hectares, it was originally known as the Royal Malaysia Navy Dockyard that became fully operational in 1984. BN Shipyard is part of the Boustead Heavy Industries Corporation (BHIC), a publicly listed company on the Main Board of the Kuala Lumpur Stock Exchange, along with its other associated companies, Boustead Penang Shipyard and Boustead Langkawi Shipyard.

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Shipbuilding Tribune Staff, October 2, 2013