PETALING JAYA: Lembaga Tabung Angkatan Tentera (LTAT) has expressed gratitude for the Cabinet’s decision to approve the plan to revive the littoral combat ship (LCS) project, which protects the fund from being negatively impacted if the project is not quickly revived.
“If this project fails to continue, the impending financial domino effect will result in an impairment of up to RM2.1bil, 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,” said LTAT chief executive Datuk Nazim Rahman in a statement.
LTAT said it has direct exposure through its majority stake in Boustead Holdings Bhd (BHB) of 59.4% as well as a 61% effective stake in Boustead Naval Shipyard Sdn Bhd (BNS).”
The Cabinet approval on the LCS project recovery plan has effectively prevented a financial disaster on LTAT and will enable it 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, would enable the fund to provide sustainable and competitive returns to its contributors, who are serving the Malaysian Armed Forces (MAF),” it added.
LTAT said it has taken proactive steps, in close collaboration with the Defence Ministry, Finance Ministry, Royal Malaysian Navy and the Special Cabinet Committee to look into solutions to revive the project by taking into consideration all aspects.
This includes financial implications to the government, as well as enhancing governance to ensure LCS ships are delivered based on the stipulated timeline.
It said it was committed to providing full cooperation in ensuring that this recovery plan could be realised in the strategic interest of the country.
Established in August 1972 as a statutory body under the Tabung Angkatan Tentera Act 1973, LTAT or the Armed Forces Fund Board is the pension fund for serving members of the Malaysian Armed Forces.