PETALING JAYA: The Armed Forces Fund Board’s (LTAT) plan to revive the littoral combat ships (LCS) project has been approved by the Cabinet to protect the fund from any negative impact.
LTAT chief executive Datuk Nazim Rahman said if this project fails to continue, the impending financial domino effect will result in an impairment of up to RM2.1 billion, which is 21% out of the total amount of the retirement funds managed by LTAT.
“As a consequence, LTAT would not be able to continue to provide returns to contributors for at least the next six years,” he said in a statement.
LTAT has a direct exposure through its majority stake in Boustead Holdings Bhd of 59.4% as well as a 61% effective stake in Boustead Naval Shipyard Sdn Bhd.
Nazim said the Cabinet’s approval of the LCS project revival plan has prevented a financial disaster in LTAT and will enable the fund to continue to focus on its capital preservation and value enhancement, which in the long run will ensure that LTAT’s financial position remains healthy. This, in turn, will enable the fund to provide sustainable and competitive returns to its contributors, who are serving the Malaysian Armed Forces.
LTAT has looked into solutions to revive the project in collaboration with the Ministry of Defence, Ministry of Finance, Royal Malaysian Navy and the Special Cabinet Committee, taking into consideration all aspects, including financial implications to the government, as well as enhancing governance to ensure all LCS will be delivered based on the stipulated timeline.
It is committed to providing full cooperation to ensure the recovery plan can be realised in the interest of the country, Nazim said.