‘LIQUIDATION, DISPOSAL WITHIN 18 MONTHS’
11 non-core subsidiaries will be affected, says chairman
FGV Holdings Bhd (FGV) will complete the disposal and liquidation of its 11 non-core subsidiaries in the next 18 months and focus more on companies that fit strategically with its transformation plan.
Chairman Datuk Wira Azhar Abdul Hamid said FGV had tried unsuccessfully to dispose of several non-core companies.
“We have exhausted all avenues. So, the other alternative is to liquidate some of these companies. Before we take any steps,
there must be a careful consideration. I expect we can solve this issue in 18 months,” he said after the launch of Securities Commission’s inaugural Corporate Governance Monitor 2019, here, recently.
In a letter issued by Azhar in January, FGV had identified several non-core businesses and assets with an estimated value of RM350 million for disposal.
FGV said on May 3 it would liquidate two non-core businesses by year-end as part of its transformation programme and renewed focus on efficiency, accountability and profitability.
The two non-core assets are Felda Engineering Services Sdn Bhd and Felda Properties Sdn Bhd.
The liquidation is FGV’s last resort as it has failed to secure buyers for them.
“FGV was in discussions with Felda (Federal Land Development Authority) for almost a year from February last year and with the settlers’ cooperative Koperasi Permodalan Felda Malaysia Bhd (KPF) from November last year on a possible takeover of Felda Engineering and Felda Properties.
“Neither Felda nor KPF agreed to acquire the two companies,” it said.
As part of the liquidation deal, affected employees from the two entities will receive between 10 and 30 months of their current monthly salary, depending on the years of service
All 135 employees will also get full medical insurance coverage until December 31 this year.
Azhar said while talks on the renewal of the land lease agreement (LLA) between FGV and Felda were ongoing, there was no progress on the issue.
“FGV is a commercial entity. We have to look at the commercial rationale and financial impact before making a decision.
“The LLA stated that the commercial land is under a 99-year lease. In that case, if Felda wanted to take back the land, we shall pursue. As far as FGV is concerned, every situation will need to go through a thorough discussion,” he said.