KUALA LUMPUR – Putrajaya will raise RM9.9 billion in sukuk bonds with a government guarantee as part of its plan to restore the Federal Land Development Authority’s (Felda) cash flow and manage its corporate debt.
Minister in the Prime Minister’s Department (Economic Affairs) Datuk Seri Mustapa Mohamed (Bersatu-Jeli) said Felda has been facing financial issues since 2013.
“The cabinet on October 14 approved a Felda recovery plan that included measures such as raising government-guaranteed sukuk bonds worth RM9.9 billion.”
The plan, he said, is for the agency to clear its debts using RM6 billion from the funds, with the remainder be used to increase its core earnings by purchasing more shares in FGV Holdings Bhd and terminating its land lease agreement with the company.
“The losses were contributed by the Bursa listing of FGV Holdings in 2012 that reduced Felda’s earnings, as well as dipping palm oil prices,” he said in reply to a question by Datuk Ahmad Nazlan Idris (BN-Jerantut) at the Dewan Rakyat today.
Mustapa said Felda had been forced to take on several loans, and suffered a loss of RM10.7 billion to ensure daily operations continue and fulfil its commitments to settlers.
“In September, Felda informed the government that it is unable to settle several loans and has liquidity issues amounting to RM1.3 billion.
“Additionally, high debts incurred by the settlers and poor debt collection contributed to Felda’s present financial woes.”
The government, he said, has since agreed to grant a two-year moratorium for one of its loans, while other financial institutions have given Felda a six-month moratorium.
Mustapa added that the government, through the Felda special task force chaired by Tan Sri Abdul Wahid Omar and includes Felda chairman Datuk Seri Idris Jusoh, has drawn up various remedial measures that will ensure the agency generates profits by 2023. – The Vibes, December 14, 2020
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