Govt plans 'Project Earth' to overhaul LTAT, restructure Boustead

• Under the previously scrapped "Project Moonshot", Boustead was to transition from a diversified conglomerate into a real estate-focused entity. 

KUALA LUMPUR (Feb 25): Malaysia’s Armed Forces Fund Board (LTAT) and its flagship company Boustead Holdings Bhd will be restructured under a new plan dubbed ‘Project Earth’.

The revised plan aims to provide LTAT with a more inclusive and strategic approach to restructuring Boustead and its subsidiaries, Minister of Defence Datuk Seri Mohamed Khaled Nordin said in a written parliamentary reply.

“The objective is to enhance operational efficiency and productivity while ensuring LTAT’s subsidiaries remain competitive in their respective industries,” Mohamed Khaled said without disclosing further details on the restructuring process.

Mohamed Khaled was responding to a question from Datuk Seri Ikmal Hisham Abdul Aziz (PN-Tanah Merah) on the status of LTAT’s restructuring efforts.

Project Earth was approved by LTAT’s board in August 2024 and subsequently presented to the minister of finance II, the senior director of economic and financial affairs at the Prime Minister’s Office, and later to the Cabinet in December 2024.

'Project Moonshot' scrapped

The remark comes amid ongoing concerns over LTAT’s financial health and the suspension of the earlier ‘Project Moonshot’ restructuring plan since 2023. Among others, Project Moonshot called for LTAT to streamline holdings by divesting control of six key subsidiaries.

In November 2024, the Public Accounts Committee raised serious concerns over LTAT’s financial stability and the suspension of its restructuring plan, warning that prolonged inaction could force LTAT to "liquidate its assets".

Datuk Mas Ermieyati Samsudin, who chairs the bipartisan parliamentary committee, warned that Boustead’s cash flow crisis and multiple financial challenges could erode up to 50% of LTAT’s funds, putting nearly RM5 billion of contributors’ money at risk.  

Project Moonshot also sought to increase LTAT's assets under management to RM15.7 billion by 2025 from RM11.5 billion in 2023. LTAT has faced intensified pressure to reassess its long-term sustainability strategy following the plan’s suspension.

Project Moonshot involved settling Boustead’s RM3.4 billion debt, followed by a capital restructuring exercise, allowing LTAT to hold direct stakes in six core companies instead of a single entity under Boustead, according to former LTAT chief executive officer Datuk Ahmad Nazim Abdul Rahman.

Under the plan, Boustead was to transition from a diversified conglomerate into a real estate-focused entity, while LTAT would retain exposure to Boustead Petroleum Marketing Sdn Bhd, Boustead Plantations Bhd, and Pharmaniaga Bhd (KL:PHARMA).

The plan also included the sale of LTAT’s stake in Affin Bank Bhd (KL:AFFIN) to the Sarawak government as part of a debt reduction strategy. LTAT and Boustead together sold nearly 27% stake in the lender to Sarawak last year.

LTAT took Boustead private in 2023 for RM1.15 billion after a proposed strategic partnership with Kuala Lumpur Kepong Bhd (KL:KLK) was scrapped. However, instead of reducing debt, Boustead took on an additional RM2 billion in borrowings to complete the privatisation.

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