KUALA LUMPUR: Felda has accumulated a total debt of RM10.7 billion, Minister in the Prime Minister’s Department (Economic Affairs) Mustapa Mohamed said today.
Mustapa told the Dewan Rakyat that Felda had been facing financial difficulties since 2013 due to a drop in earnings before taxes.
“To ensure its daily operations run smoothly and its commitment to serve settlers, Felda had to take loans and now has RM10.7 billion in total debt.
“In September, Felda informed the government that it was unable to repay some of its debts and is having liquidity problems of RM1.3 billion,” he said in response to a question from Ahmad Nazlan Idris (BN-Jerantut).
Nazlan had questioned the Perikatan Nasional (PN) government’s plans in restoring Felda’s cash flow and managing its corporate debt.
Mustapa said Felda’s large amount of debt was due to Felda being publicly listed under FGV Holdings Berhad (FGV), along with its high settlers’ debt and low collection rate.
Following this, the government agreed to grant Felda a two-year moratorium on one of its debts while another financial institution had granted Felda a six-month moratorium.
In order to ensure financial stability and sustainability, Mustapa said the Cabinet had approved a Felda recovery plan on Oct 14, which involved RM6 billion being used to reduce Felda’s debts.
He said Felda’s management had also established a new Felda model based on an improved administration, more efficient farm operations and use of technology.
Mustapa added that a committee, chaired by former minister Abdul Wahid Omar, was also set up to monitor the implementation of the plan. - FMT
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