[UPDATED] RM9.9 bil for Felda sukuk scheme towards agency’s recovery: MoF

KUALA LUMPUR – The Finance Ministry has confirmed a formal government guarantee of up to RM9.9 billion for the Federal Land Development Authority (Felda) to issue sukuk bonds towards revitalising the federal agency.

In a statement today, the ministry said the unity government is committed to ensuring Felda’s recovery plan.

This includes resolving settlers’ debts as previously announced as a follow-up to complete the implementation of the plan.

“Beginning in 2023, the government has channelled an allocation of up to RM1 billion yearly to enable redemption of Felda’s sukuk, which among other things will write-off the settlers’ debts,” the ministry added.

Yesterday, newly appointed Felda chairman Datuk Seri Ahmad Shabery Cheek had explained that the sukuk is also to repay debts to the Employees’ Provident Fund and Maybank.

This came after Prime Minister Datuk Seri Anwar Ibrahim refuted Bersatu president Tan Sri Muhyiddin Yassin’s claim that the settlement of Felda settlers’ debt was implemented in 2021 when the latter was prime minister at the time.

Muhyiddin alleged that due to Felda’s cash flow constraints, the present Pakatan Harapan-Barisan Nasional government has not been able to implement the debt settlement continuously.

Anwar, who is the finance minister, responded by stating that there was indeed an agreement by the previous government to dispose of the debt involved, but it was not implemented.

“Budget 2021 and Budget 2022, tabled by Perikatan Nasional, have no provision to settle and dispose of Felda settlers’ debt. I stand by this record,” Anwar had said.

“Only in Budget Madani 2023 did I start to set aside over RM990 million, as an early allocation to dispose of Felda settlers’ debt, amounting to RM8.3 billion,” he said.

He took Muhyiddin to task over the latter’s assertion.

“How can you say you have completed (the debt disposal), (when) I just signed it at the end of June. So, when you said it was completed, which part did you complete?” Anwar had said.

On June 28, the government had announced an agreement involving a government guarantee to restructure the agency’s loan via the issuance of sukuk and revolving credit as part of efforts to restore Felda’s financial position.

A major part of the restructuring of Felda’s loans is aimed at reducing the principal of Felda’s debt to financial institutions by RM7.9 billion.

It would also enable Felda to cancel 80% of the RM8.3 billion settlers’ debt. – The Vibes, July 9, 2023