‘FELDA LOOKING AT ALL OPTIONS TO STAY SUSTAINABLE’
Authority open to scrapping land lease deal with FGV and having Indonesian tycoon as unit’s shareholder
THE Federal Land Development Authority (Felda) is open to cancelling the land lease with Felda Global Ventures Holdings Bhd (FGV) and having Indonesian tycoon Martua Sitorus emerging as a big shareholder in its plantation unit.
“We are exploring all options available. This is to ensure a sustainable financial situation for Felda,” its chairman Tan Sri Shahrir Abdul Samad told NST Business recently.
It was reported that Felda was seeking the return of land currently leased and managed by FGV because it felt that it could extract higher returns.
About 335,000ha of Felda’s total landbank of 850,000ha are run by FGV under a land lease of 99 years established in 2012.
Another 475,000ha are appropriated to Felda settlers, while Felda managers operate the remaining 40,000ha.
If the plantations are transferred back to Felda, the land lease agreement between the two parties will come to an end.
As at December last year, FGV’s long-term land lease liabilities stood at RM4.13 billion, the largest component of its long-term debt.
It was also reported that FGV was likely to see Martua, who is Wilmar International Ltd co-founder, as a new shareholder.
Since Shahrir took over Felda at the beginning of the year, he and his team have been exploring new ideas to maximise its investment assets and investment in FGV.
Felda, which comes under the Prime Minister’s Department, was set up 61 years ago to champion the socio-economic agenda of providing “land for the landless, jobs for the jobless”.