Felda will bounce back in 2023, says Tok Pa

 

Mustapa Mohamed tells the Dewan Rakyat that the Cabinet had approved Felda’s recovery plan on Oct 14. (Bernama pic)

KUALA LUMPUR: The Federal Land Development Authority’s (Felda) recovery measures are expected to bring about positive results in 2023, Minister in the Prime Minister’s Department (Economic Affairs) Mustapa Mohamed said today.

The measures include the setting up of a task force to monitor the implementation and effectiveness of Felda’s recovery plan, he said. The Cabinet approved Felda’s recovery plan on Oct 14.

The task force chaired by Abdul Wahid Omar will monitor the measures so they are implemented effectively and smoothly, Mustapa said.

“This will ensure Felda will be as successful as other major plantation operators and carry out its responsibility as an agency that champions the welfare of more than 100,000 settler families without relying on the government,” the minister told the Dewan Rakyat today.

He was answering Ahmad Nazlan Idris (BN-Jerantut) who wanted to know the government’s plan to resolve Felda’s cash flow and corporate debt problems.

Mustapa, who is popularly known as Tok Pa, said Felda’s recovery would not be complete simply through government action. Instead, it had been instructed to strengthen its management.

According to Mustapa, Felda has faced financial problems since 2013 with a drop in its profit before tax.

Among the reasons for this was the listing of FGV Holdings (previously known as Felda Global Ventures) in 2012 where Felda lost an important source of income as well as weak palm oil prices.

He said Felda’s debts now stood at RM10.7 billion. In September, Felda informed the government that it could not afford to repay some of its debts and faced liquidity problems totalling RM1.3 billion.

“The government has agreed to give a two-year moratorium to Felda for one of its debts and another institution gave Felda a six-month moratorium,” he said.

Mustapa said high settlers’ debts and low debt collection rate aggravated the situation and hurt Felda’s financial position.

Among proposals approved in the recovery plan were the issuance of government-guaranteed sukuk amounting to RM9.9 billion, of which RM6 billion would be used to reduce Felda’s debt burden.

The rest will be used to boost its core revenue through the acquisition of FGV’s shares and termination of their land lease agreement. - FMT