TRANSFORMATION: 56 years ago, none of the plantation companies was locally owned
KUALA LUMPUR: FELDA Global Ventures Holdings Bhd's (FGV) debut on the Main Market of Bursa Malaysia today will mark an important milestone, not only for the settlers but also for the nation.
Fifty-six years ago, when Felda was established as a social engineering scheme to uplift the lives of the rural poor, none of the plantation companies was locally owned.
Today, 112,635 Felda settlers will see FGV, the commercial arm of Felda, ranked as the third-largest listed palm oil operator globally, in terms of landbank.
"These settlers deserve to see this success.
"Through their toil and sacrifices, opening up jungles for cultivation since the 1950s, they have helped to develop the RM80 billion palm oil industry that we see today, which are mostly locally owned," FGV's president and group chief executive officer Datuk Sabri Ahmad said at a luncheon here on the eve of the company's much-awaited listing.
"In fact, the RM15,000 windfall that was given to settlers, their wives and family members was from part of the listing proceeds. None of it was money from the national Treasury."
He expected the initial public offering of FGV shares to raise some RM10 billion. Of this amount, RM4.5 billion will go to FGV and RM5.5 billion to Federal Land Development Authority (Felda Board), which in turn provided RM1.7 billion for the windfall.
Sabri said apart from this one-off windfall, Felda Board, which will own 37 per cent of FGV after listing, would hive off 20 per cent of this to a trust fund being set up for the benefit of the settlers.
"Through this trust fund, dividends FGV declares will be distributed to the settlers if the board of trustees agrees to do so.
"For example, if FGV makes a profit of RM1 billion, RM500 million will be distributed to shareholders as our stated dividend policy is 50 per cent.
"This will mean that the trust fund, which will own 20 per cent of FGV, will have RM100 million to distribute to settlers," said Sabri, who stressed that these figures were just examples.
FGV reported a net profit of RM1.01 billion last year compared with RM929.4 million previously.
The consensus among analysts from five banks is a projection of a profit of RM1.2 billion for the company this year.
Sabri said the settlers would still own their plot of land and enjoy benefits such as Hari Raya bonus and financial help to repair their houses after listing.
"We are proud the settlers are part of our shareholders. We may have to rent the national stadium at Bukit Jalil for our annual general meeting as we will have more than 100,000 shareholders," Sabri said tongue-in-cheek.
He said the company planned to be among the best plantation companies in three to five years.
Sabri said 37 per cent of the company's trees were young and immature. This puts the plantation group in good stead to chalk up sustainable yield in the future.
FGV is Asia's biggest IPO since February last year and the world's second biggest so far this year, behind social media network Facebook's float, which raised US$16 billion (RM51 billion) in New York.
The plantation has already garnered cornerstone investments of US$1 billion from 12 cornerstone investors, who have pledged to hold their shares for six months after listing, including Qatar Investment Authority and Hong Kong insurance company AIA Group Ltd.