KUALA LUMPUR: Federal Land Development Authority (Felda) will soon issue RM2 billion long term sukuk before the end of the year, a sign of confidence among the banking community.
“Three months ago, a local bank approached us. It is now arranging for Felda to issue RM2 billion sukuk before the end of the year. The bank is talking to prospective bondholders.
“This is the turning point for Felda,” said Felda chairman Tan Sri Shahrir Abdul Samad, adding this shows bankers are confident in Felda’s ability to repay.
“You see, apart from the sukuk issuance, we are also finalising the sale of our hotel in London,” he told reporters here today in a briefing.
Three years ago, Felda Investment Corp Sdn Bhd, the investment arm of Felda acquired a 4-star hotel in the upmarket Kensington area in London for £60 million or RM330 million.
The Grand Plaza Hotel has 62 guest rooms and two units of three-bedroom serviced apartments.
Shahrir likened the hotel sale to monetising non-core assets of Felda.
“The hotel is like a Rolls Royce, a status symbol for Felda. It is just sitting pretty and not generating direct benefit for settlers.”“We hope to realise and bring back some RM500 million to strengthen our cashflow, working capital and retire some of our short term loans,” he said.
Earlier in the year, Felda had also made some money when it sold back the 2 per cent stake sale in Malayan Bank Bhd to the bank for RM280 million.
“As we consolidate our financials, we should be in the positive zone by the end of the year,” he said.
Since Shahrir took chairmanship if Felda at the beginning of this year, he noted the sentiment among the original 112,635 settlers have improved considerably.
Since he led this government agency, Shahrir had initiated the “Consensus Movement” (or Gerakan Muafakat) to forge better understanding in problem-solving among the sprawling nationwide community.
“Through such channels we are able to correct the misunderstandings and wrongful allegations of non-payment of incentives payable to eligible settlers announced, two months ago,” he said.
“We’re optimising existing platforms such as that of Malaysian Palm Oil Board replanting incentives and partnering Syarikat Perumahan Negara Bhd to help settlers,” he said.
Out of the original 112,635 settlers, Shahrir noted 94,956 or 84 per cent had stayed loyal by continuing to sell their fruits to Felda mills while quite a number had chosen to be independent or sold off their land or taken Felda to court but had lost in their legal actions.
“Through this ‘Consensus Movement’ and several administrative amendments, we have managed to regain trust and confidence among those who had exited the system. Some of them want to come back to sell their fruits to our mills,” he said.
“The ultimate aim is to welcome back as many as those who had exited the system so that we can be one big Felda family again. By the first quarter of 2018, I am hopeful of 6,364 settlers who had left, will come back and our settlers force would total 101,320,” he added.
Shahrir reiterated it is important that Felda unite as many settlers possible so that planters can better benefit from the government's various incentive schemes.
On forecasting palm oil prices which is currently trading at around RM2,800 per tonne, Shahrir hopes prices would firm up for the benefit of oil palm planters and Malaysia’s economy.