Felda begins asset sale to cut debts
KUALA LUMPUR: The Federal Land Development Authority (Felda), which is embroiled in allegations of mismanagement and mounting debts, has commenced the sales of non-strategic assets to accommodate its liabilities, says chairman Tan Sri Megat Zaharuddin Megat Mohd Nor.
“We have started the process of selling non-strategic assets both within and outside the country and this process will probably run until the middle or end of next year.
“It is hoped that the prices we get from the sales of these assets can accommodate our liabilities, as well as help ease the burden of settlers who are saddled with low oil palm prices,” he said on the sidelines of the Kolej Yayasan Felda’s convocation.
Megat Zaharuddin said Felda has received enquiries from potential buyers to purchase the assets but it was not ready to reveal more information as the sales and purchase agreements needed to be approved by the government.
“We are following good governance to make sure that we give equal opportunity to the interested parties. Those interested must submit their bids for the assets that they want,” he said.
In September, Felda announced the disposal of its assets, including hotels, apartments and a student hostel totalling about RM2.2bil, which was expected to help cut its debt to RM6.5bil by year-end from RM8.05bil debt recorded as at June 30.
Megat Zaharuddin said with this measures in place, the government agency would be on track to become profitable again and be able to turn around in at least the next two years.
He said the sales of assets were being made to improve Felda’s cashflow as it had taken a lot of loans from banks.
“So, we have to get a bit of cashflow from outside of what we normally do that is through revenue from palm oil or debt repayment from settlers.
“We also have an SOP (standard operating procedure) where every settler earning less than RM1,000 was allowed to defer their debt repayment to Felda and whatever social problems encountered by the settlers, we will see how we can help them,” he said.