Felda is looking to dispose of its non-strategic assets

The White Paper concerning the Federal Land Development Authority’s (Felda) finances is likely to be tabled in the current session of Parliament, from yesterday to Dec 11.

Economic Affairs Minister Datuk Seri Mohamed Azmin Ali told The Edge Financial Daily that the tabling will be done in the current sitting after Dewan Rakyat completes the debate and passing of Budget 2019.

“It is part of the Parliament Secretariat schedule,” he said when met at the Parliament lobby yesterday. It is said that the tabling of the White Paper is scheduled for Dec 10.

On Sept 20, Tan Sri Megat Zaharuddin Megat Mohd Nor, the chairman of Felda, the largest shareholder of FGV Holdings Bhd, said the agency’s cash flow is “almost empty” and this must be addressed urgently.

Earlier yesterday, Mohamed Azmin reiterated that Felda’s cash flow is currently in a “critical situation”. “Felda’s borrowings from financial institutions amounted to RM8 billion as at June 30. The new board of directors is working with these financial institutions to restructure the loans,” he said in a reply to Pasir Gudang member of parliament Hassan Abdul Karim’s parliamentary question about whether it is true that Felda’s cash flow is almost nil, as well as the steps taken by the government to safeguard Felda settlers’ interest.

“Felda is also looking to dispose of its non-strategic assets, such as properties in London, Sabah and Sarawak, which it bought at a combined cost of RM2.2 billion. These efforts are expected to reduce Felda’s borrowings by 15% to RM6.8 billion by the end of this year,” said Mohamed Azmin, adding that Felda’s financial woes are compounded by lower crude palm oil prices.

While palm oil prices remain weak, Primary Industries Minister Teresa Kok highlighted that export prices of the commodity from Malaysia remain higher than those from Indonesia.

Kok warned that if Malaysia’s palm oil prices remain less competitive than Indonesia’s, there is a possibility that China may not import an additional 500,000 tonnes of palm oil from Malaysia.

“I was told that currently, palm oil prices of Indonesia are more than US$40 (RM166.40) lower than ours, so even for Chinese state-owned enterprises, their procurement will still be based on prices,” she said.

Kok also cited Malaysia Palm Oil Board data that for the first nine months of this year, palm oil exports to China saw a reduction of 144,777 tonnes or 10.8% to 1.2 million tonnes, from 1.34 million tonnes in the same period last year.

Earlier yesterday, Prime Minister Tun Dr Mahathir Mohamad told Parliament that China had expressed its intention to buy another 500,000 tonnes of palm oil from Malaysia provided that the prices are competitive. This follows his official visit to China in August.

Last year, China imported 1.92 million tonnes of palm oil from Malaysia, behind India at 2.03 million tonnes and the European Union at 1.99 million tonnes.

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