Zakaria says move is one of the op­tions to un­lock value, ad­dress cash flow is­sue

New Straits Times - - Business - AMIR HISYAM RASID SEREM­BAN bt@me­di­aprima.com.my

FED­ERAL Land De­vel­op­ment Author­ity (Felda) se ems to b e se­ri­ous about tak­ing back the plan­ta­tion land it leased out to Felda Global Ven­tures Hold­ings Bhd (FGV).

This fol­lows FGV pres­i­dent and chief ex­ec­u­tive of­fi­cer Datuk Zakaria Ar­shad’s state­ment that both par­ties have been in talks on the pos­si­ble ter­mi­na­tion of the land lease agree­ment (LLA) for more than a month.

Yes­ter­day, Zakaria said the LLA ter­mi­na­tion is one of the re­vamp op­tions to un­lock FGV’s value as well as ad­dress Felda’s cash flow is­sue.

He hinted that more re­struc­tur­ing ex­er­cises are on the cards.

“We are con­sid­er­ing a few ma­jor re­vamp op­tions but can­not re­veal them yet. These op­tions will cover all three in­ter­ests in­clud­ing Felda, other stake­hold­ers and FGV,” he told re­porters in Ban­dar En­stek yes­ter­day.

FGV is await­ing its next dis­cus­sion with Felda on the re­vamp op­tions for both par­ties’ in­ter­ests, Zakaria added.

He, how­ever, stressed that ter­mi­nat­ing the LLA is a last re­sort.

Un­der the LLA, FGV must bear the cost of re­plant­ing to im­prove its land­bank’s age pro­file of around 15.8 years old. It also has to pay Felda RM250 mil­lion an­nu­ally for 20 years plus 15 per cent share of FGV’s an­nual prof­its from the LLA-re­lated land.

Zakaria said FGV is open to the idea of hav­ing Wil­mar In­ter­na­tional co-founder Mar­tua Si­torus and PT Ea­gle High Plan­ta­tions Tbk’s ma­jor owner, Tan Sri Peter Son­dakh, as FGV’s ma­jor share­hold­ers.

“Mar­tua is very ex­pe­ri­enced in the trad­ing of palm oil and Ea­gle High is parked un­der Felda. If they want to be as­so­ci­ated with FGV, it is okay. Like I said pre­vi­ously, who­ever has the ex­per­tise and wants to take up eq­uity stakes in FGV, we wel­come it.”

It was re­ported that the po­ten­tial new share­hold­ers may in­ject their plan­ta­tion as­sets into FGV in ex­change for an is­suance of 25 per cent new eq­uity stake. Al­ter­na­tively, they may ac­quire the tar­geted eq­uity stake from Felda.

In­vestors did not re­spond warmly to re­ports of the two pos­si­ble re­vamps. Yes­ter­day, FGV fell again to close at RM1.94, while on Tues­day, the stock eased 8.45 per cent to RM1.95 from Fri­day’s close of RM2.13.


Felda Global Ven­tures Hold­ings Bhd is await­ing its next dis­cus­sion with Fed­eral Land De­vel­op­ment Author­ity on the re­vamp op­tions.

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