Felda suffers RM10.6b debt, expected to recover in 2023

 

The Federal Land Development Authority (Felda) has an unsustainable capital structure and spiralled into a staggering RM10.6 billion in debt.

These were among the serious problems faced by the agency as identified by the special task force, said the Minister in the Prime Minister's Department (Economy) Mustapa Mohamed.

The task force is chaired by the former minister Abdul Wahid Omar and also joined by Felda chairperson Idris Jusoh himself.

In a statement, Mustapa said the problems caused by declining incomes especially on the lease payment for 351,000 hectares of farmland and low-profit sharing as compared to the estimation under the Land Lease Agreement (LLA).

"Poor financial management had also led to the problems faced by Felda," Mustapa said.

He added that the task force's report to tackle issues concerning Felda was presented to the cabinet on Oct 14.

He said the cabinet had accepted the following proposals:

1. Restructuring the debt with the Finance Institution;

2. Increasing the core revenue from Felda's farmland by terminating the LLA; and

3. Encouraging the settlers to be more independent.

He said the cabinet had also approved the RM9.9 billion Sukuk for Felda with the government's guarantee to implement Felda's recovery plan.

With the said initiatives, Felda's financial position is expected to show a positive flow beginning in 2023.

Mustapa reiterated that the initiatives will be monitored thoroughly by the monitoring committee who reports directly to the prime minister. - Mkini