Boustead Heavy Industries Corporation Berhad (BHIC) has officially issued a circular to its shareholders detailing the proposed RM28.00 million cash divestment of three adjoining parcels of mixed industrial and building land in Pulau Jerejak, Penang.
The group has called for an Extraordinary General Meeting (EGM) on Wednesday, June 24, 2026, allowing shareholders to vote on the transaction. The property sale is being managed by corporate adviser UOB Kay Hian (M) Sdn Bhd.
The transaction will be executed via Boustead Penang Shipyard Sdn Bhd (BPS), a wholly owned subsidiary of BHIC. The buyer, Karya Koperat Sdn Bhd, will acquire the three parcels of land under a 100% cash terms structure.
The 26-acre site historically housed active shipbuilding, ship repair, and offshore fabrication infrastructure. However, facility utilization declined sharply following the completion of a major topside oil and gas project in October 2018. The prolonged global oil price downturn subsequently flattened local demand, leaving the shipyard entirely idle.
Management has explicitly reclassified the Pulau Jerejak tracts as surplus, non-core assets. Retaining the empty shipyards yields no operational utility while burdening the company with continuous maintenance costs and holding liabilities.
Monetising the idle asset provides BHIC with an instantaneous capital runway to enhance day-to-day liquidity without diluting equity. The group plans to channel the cash proceeds, with a gain of RM15 million, directly toward day-to-day working capital and operational expenditures.
Crucially, the liquidation of non-core properties aligns with BHIC’s long-term pivot toward high-priority government partnerships. The group is focusing its capital resources on recurring Maintenance, Repair, and Overhaul (MRO) contracts securing the naval and aviation assets of the Royal Malaysian Navy and the Royal Malaysian Force.
