Sale of Felda coop shares 'won't hurt settlers'

PARLIAMENT The proposed sale of Felda Holdings shares held by settler cooperative Koperasi Peneroka Felda (KPF) to Felda Global Ventures Holdings (FGV) will not be to the detriment of settlers, the government assures.

According to Deputy Minister in the Prime Minister's Department Razali Ibrahim (left), their proposed RM2.2 billion purchase will prioritise the settlers' welfare.

"KPF is the best cooperative, in terms of distributions (of dividends) and operations. We will ensure that (the shares purchase) will benefit both FGV and and KPF members," he said during Question Time at the Dewan Rakyat today.

However, Razali failed to specify how the purchase will maintain the 15-16 percent annual dividend enjoyed by KPF members today.

Lim Guan Eng (DAP-Bagan), in his follow up question, had asked how the RM2.2 billion will be used to ensure the same steady dividends for the settlers.

FGV owns 49 percent of Felda Holdings while KPF owns 51 percent. KPF's shares were earlier valued at RM3 billion.

Its complicated as Felda 'very large'

Lim (below) had also asked if revenue from Felda's investments in the hotel business in London would be able to cover its initial costs.

To this, Razali said that the investments already made Felda a profit "on paper" as it had purchased the Grand Plaza service apartment for GBP 98 million while the property was valued at GBP 115 million.

However, he cannot give specifics as he claimed that Felda is a "very large agency" with various sections too complicated to explain.

"This is not even considering the 90 percent occupancy rate. If we're talking about profits, it will be profitable. But I cannot answer on revenue and whether it is adequate to cover the capital expenditure as Felda is a very large agency," he said.

He added that the purchase was made by Felda Investment Corporation (FIC), which is the agency's investment arm and one of its three companies which deal with non-core business, through due process.

As such, he said, the issue of Felda Holdings minority shareholders not being consulted does not arise.

"FIC was formed with RM500 million under the name Capital Protocol Sdn Bhd on July 2, 2013, as using the word 'investment' in a company name required Finance Ministry approval and would take time. The name change is underway," he said.

He said that the non-core businesses- FIC, FGV Middle East and Grand Borneo Hotel - are all "encouraging (memberansangkan)" and exist to diversify its income stream.

"You would agree that we cannot put all our eggs in one basket," he said.

Replying to a subsidiary question by Johari Abdul Ghani (BN-Titiwangsa), he said that the government will also ensure that Felda's expansion into non-core businesses would not compete with existing companies like Sime Darby.