We refer to the announcements made on 16 December 2011, 1 October 2013, 17 July 2014, 10 May 2021 and 2 June 2022 with regard the contract between Boustead Naval Shipyard Sdn. Bhd. (“BNS”), an associate  of Boustead Heavy Industries Corporation  Berhad (“BHIC  or “Company”), and Ministry of Defence Malaysia (“MoD”) (acting on behalf of the Government of Malaysia) dated 17 July 2014 for the design, construct, equip, install, commission, integrate, test and trials, and deliver six (6) units of Second Generation Patrol Vessels with Littoral Combat Ship (LCS) (“LCS Vessel”) capability for the Royal Malaysian Navy (“Contract”) at a contract value of RM9 billion.

Following the successful implementation and achievement of the objective stipulated in the Fifth Supplemental Contract dated 31 May 2022, the Company wishes to announce that BNS and MoD have finalised the negotiations on the resumption of the Contract and on 26 May 2023 signed a Sixth Supplemental Contract (“SA6”) to vary the Contract, amongst others, with the following salient terms and conditions:

(i)         the resumption of all design and construction activities shall commence upon signing the SA6;

(ii)        the reduction of the LCS Vessels from 6 units to 5 units;

(iii)       the duration of the Contract shall be extended with the first vessel to be delivered, fully tested and trialled in August 2026 and the fifth vessel in April 2029;

(iv)       the total contract price is revised to RM11.2 billion following, amongst others, the approved change of specifications and extension of time; and

(v)        the terms of payment is varied from milestone activity to progress of works reflecting the various elements in the Contract based on weightage to the design, equipment, construction and trials & commissioning.

Any further material developments on the above matter will be announced to Bursa Malaysia Securities Berhad accordingly.

This announcement is dated 26 May 2023.