KUALA LUMPUR - The cabinet has approved the Federal Land Development Authority's (Felda) proposal to terminate its land lease agreement with FGV Holdings Bhd (FGV).
Minister in the Prime Minister's office Datuk Seri Mustapa Mohamed said this was among the recommendations accepted during the cabinet meeting on October 14 aimed at raising the troubled agency's core income from its smallholdings.
Additionally, the cabinet has also approved the proposed issuance of government-backed sukuk funds by Felda amounting to RM9.9 billion to implement its recovery plan.
The government, he said, had also agreed to restructure Felda's debts with financial institutions and raise the level of independence of its settlers.
The decision comes after the government's formation of a special taskforce comprising former finance minister Tan Sri Abdul Wahid Omar and Felda chairman Datuk Seri Idris Jusoh to identify solutions to its financial woes.
Mustapa said while the Felda was an institution that was important for national development, the agency “faced several serious issues that needed to be addressed immediately”.
Among the main problems faced by Felda was its “unsustainable” capital structure and high level of debt amounting to RM10.6 billion, Mustapa said.
Yesterday, FGV had clarified that the land it leased from Felda under the LLA were estates that did not include those cultivated by current Felda settlers.
Signed on November 1, 2011, the LLA also did not include FGV's palm oil mills.
FGV also noted that as of October 27, Felda had yet to provide updates on the LLA, but it was prepared to follow the procedures outlined in the agreement if Felda issues a notice on the matter. – The Vibes, October 28, 2020
