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Wednesday, February 29, 2012

FELDA says listing on track, backed by ‘majority’ of settlers


February 29, 2012
Isa said the decision to list FELDA was the prerogative of “the FELDA board and the minister in charge of FELDA”. — File pic
KUALA LUMPUR, Feb 29 — Putrajaya will move ahead with the proposed listing of FELDA Global Ventures Holdings Berhad (FGVH), with FELDA Group claiming today to have the backing of “the majority of settlers”, despite reports of widespread opposition.
In a statement here, FELDA Group gave its assurance that the listing would see settlers retaining full ownership of their land and benefitting directly from potential revenues.
It also pointed out that FGVH is wholly owned by the Malaysian government and that the listing decision “lies only with the FELDA board and the minister in charge of FELDA”.
“We have always been very clear that absolutely none of the FELDA settler-owned land will be touched for the proposed listing. Only the land currently held by FELDA Holdings Bhd will be involved,” FELDA Group chairman Tan Sri Mohd Isa Abdul Samad said in the statement.
“In addition, the settler’s holdings in FELDA Investment Co-operative (KPF) will remain untouched. A special purpose vehicle (SPV) will be established to provide for the FELDA settlers’ interest directly,” he added.
PKR recently charged that FELDA’s formation of the SPV to take the majority stake in FGVH would only lower its listing value, adding that this decision was a direct snub of the co-operative.
Earlier this month, a group of settlers won a temporary court order blocking the transfer of shares from their co-operative to FGVH, a crucial step in Putrajaya’s plans to list the plantation firm.
But in response, Isa later announced the SPV and said it would cater for the welfare of some 112,000 settlers. He also blamed the opposition for misleading the settlers into blocking KPF’s sale of 51 per cent in commercial arm FELDA Holdings to FGVH.
ANAK asserts that settlers will be paid in shares, not cash. — File pic
Continuing his argument today, Isa said that as any potential proceeds from the proposed listing would not be channelled through KPF, the SPV would assume this role and ensure that settlers would benefit directly from the listing and participate fully in any potential growth.
“Soon we will be going down to the ground to explain the situation to settlers directly,” he said.
KPF has approximately 220,000 members, of which 112,635 are FELDA settlers. The rest are FELDA employees and children of settlers.
Isa added that the proposed listing was crucial towards strengthening FELDA’s objectives and ensuring that future generations of FELDA settlers would not be dependent on fluctuating crude palm oil prices.
On media reports that market capitalisation of the proposed listing could touch some RM21 billion, Isa called for an end to speculation, saying that nothing has been finalised as yet.
“I again urge all parties, including the media, not to make speculative statements that may prejudice the outcome. I am sure the FGVH management will provide the necessary information as and when approvals are obtained from the authorities concerned,” he said.
FGVH also stated today that it has no intention to register any portion of its initial public offering (IPO) in the United States or to conduct an offering of its securities in the US.
Reuters reported last week that Putrajaya could delay FGVH’s listing due to settlers’ opposition, saying the deal risks undermining Barisan Nasional’s (BN) support from voters long considered the ruling pact’s vote bank.
“The prime minister is concerned about this. He wants the listing to happen but he may take a step back to ensure the settlers are satisfied,” an unnamed senior government official with direct knowledge of the listing plans was quoted as saying in the news report.
Prime Minister Datuk Seri Najib Razak had recently said the listing of FGVH, announced in Budget 2012, is expected to take place in April instead of the middle of the year as was earlier planned.
But critics contend that the proposed listing, which will see loss-making FGVH assume control of KPF, will short-change smallholders and saddle FELDA with up to RM1.5 billion in yearly deficits.
FGVH subsidiaries such as FELDA Iffco Sdn Bhd, FELDA Global Technologies, FELDA Global Ventures Middle East and FELDA Global Ventures Arabia are reported to have chalked up accumulated losses of around RM500 million up to last year.
The profitable FELDA Holdings has a workforce of some 19,000 employees, with a labour force of 46,795 workers at 300 estates, 70 palm oil mills, seven refineries, four kernel-crushing plants, 13 rubber factories, manufacturing plants and several logistic and bulking installations spread throughout Malaysia and several locations overseas.
The government has said the move will result in a RM5.9 billion lump-sum payment to settlers but the National FELDA Settlers’ Children’s Association (ANAK) has insisted it will not be in cash but shares in FGVH.
Former finance minister Tengku Razaleigh Hamzah has also criticised the move, saying it would expose land belonging to 200,000 smallholders to the open market.
But former PM Tun Dr Mahathir Mohamad recently defended the planned listing of FGVH as a “great opportunity” for FELDA to expand.

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