Felda to restructure debt, sell non-strategic assets, says Azmin

The strategies will enable Felda to stabilise its cashflow in the next 2 years

By P PREM KUMAR

The Federal Land Development Authority (Felda) is facing a “very critical” cashflow, forcing the state agency to restructure its RM8 billion debt, while looking to dispose of non-strategic assets worth RM2.2 billion.

Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said these strategies will enable Felda to stabilise its cashflow in the next two years, while realising its commitment to 112,635 settlers.

Azmin said Felda’s new management, which was appointed in July, has been discussing with several financial institutions to restructure the agency’s debt, which would result in savings of 15% to balance the debt of RM6.8 billion by year-end.

Apart from the debt restructuring, Felda is also exploring opportunities to dispose of non-strategic assets, namely properties in London, Sabah and Sarawak which were purchased at a total cost of RM2.2 billion.

“The government would like to reiterate its commitment to restore Felda at the soonest for the wellbeing of the settlers,” Azmin told the Dewan Rakyat yesterday.

He was responding to a query from Pasir Gudang MP Hassan Abdul Karim who asked the government to state the financial position of Felda and the impact on the settlers.

Felda’s new management has been discussing with several financial institutions to restructure the agency’s debt, says Azmin (Pic: TMRpic)

In July, the government announced the appointment of Tan Sri Megat Zaharuddin Megat Mohd Nor as the new Felda chairman, replacing Tan Sri Shahrir Abdul Samad who stepped down on May 14.

Azmin said apart from the heavy debt burden, depressed crude palm oil prices are also a primary factor that affects Felda’s cashflow.

He added that the government will detail how it plans to turn around the debt-riddled Felda through a parliamentary white paper.

The white paper will be tabled in the current parliamentary session, which sits until December.

The white paper is expected to reveal factors that led Felda to its current status, while outlining detailed mechanisms to return the agency to its glory days.

A comprehensive action plan to benefit Felda settlers is also in the works and will be unveiled soon.