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08 May 2012| last updated at 09:50AM

Big investor interest in Felda listing

By RUPA DAMODARAN AND ZAIDI ISHAM ISMAIL | news@nst.com.my

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KUALA LUMPUR: FELDA Global Ventures Holdings Bhd shares that are set aside for investors approved by the International Trade and Industry Ministry have received overwhelming response.

The 419.54 million shares for Bumiputera institutional and selected investors were oversubscribed by 17 times, said a source familiar with the matter.

This indicates investors’ strong interest in the upcoming listing of the Federal Land Development Authority’s (Felda) commercial arm, the source said. Applications for the ministry’s portion of the shares closed on Friday.
The 419.54 million shares are part of 2.19 billion shares under FGVH’s initial public offering (IPO). A stock market source said FGVH was scheduled
for listing on Bursa Malaysia’s main board on June 25, making it possibly Asia’s largest IPO this year.

The IPO involves 1.92 billion shares offered to institutional investors (including the 419.54 million belonging to the ministry), while the remainlistinging 283.61 million shares are for retail investors. The 2.19 billion new shares are equivalent to 63 per cent of FGVH’s enlarged share capital.

Felda chairman Tan Sri Mohd Isa Abdul Samad said the IPO would attract greater participation from foreign investors in the agricultural sector and, consequently, would add one more investment-grade stock to the bourse.
“With this listing, Felda can fully focus on enhancing the standard of living of settlers through social development programmes and help improve corporate governance, thus providing greater transparency and accountability to its shareholders,” Isa told the New Straits Times in an email interview.

Prime Minister Datuk Seri Najib Razak, as the minister in charge of Felda, will announce a windfall for Felda settlers today in Jengka 8, Jerantut, in Pahang. The payment is in recognition of the settlers’ commitment over the last 56 years. Isa said: “One of the benefits of the listing will be the improvement in the standard of living of settlers. “While none of the settlers’ land will be used for the listing, they can enjoy the potential dividends accruing from the stake in FGVH (that is) held in trust by a special purpose vehicle, which will be set up for the settlers.” Felda will hive off 20 per cent of the 37 per cent remaining stake it will own in FGVH after listing to settlers.

This stake, worth RM3.7 billion, will be held in trust for registered settlers in perpetuity. Isa said Felda’s 112,635 settlers would continue to enjoy productivity bonuses, infrastructure facilities and Hari Raya bonuses. On Felda’s role after the listing, Isa said the flotation was in line with the government’s policy of reducing its role in business. “Following the divestment of its stake in FGVH, Felda will focus solely on wealth creation and economic elevation of settlers.

“FGVH will focus on its strategy to become a leading global integrated and diversified agri-business multinational.”

File pix by Effendy Rashid

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