KUALA LUMPUR: The Federal Land Development Authority (Felda), which has been hit with allegations of mismanagement and mounting debts, has started selling its non-strategic assets to accommodate its liabilities, says chairman Megat Zaharuddin Megat Mohd Nor.
“We have started the process of selling non-strategic assets both within and outside the country.
“This will probably run until the middle or end of next year.
“It is hoped that the revenue we get from the sale of these assets can accommodate our liabilities as well as help ease the burden of settlers who are saddled with low oil palm prices,” he told reporters on the sidelines of the Kolej Yayasan Felda’s convocation here today.
Megat Zaharuddin said Felda had received inquiries from potential buyers to purchase the assets but it was not ready to reveal more information as the sale and purchase agreements needed to be approved by the government.
“Those interested must submit their bids for the assets that they want,” he said.
In September, Felda announced the disposal of its assets, including hotels, apartments and a student hostel, costing a total of RM2.2 billion.
This was expected to help cut its debts to RM6.5 billion by the year-end from RM8.05 billion recorded on June 30.
Megat Zaharuddin said with this in place, the government agency would be on track to become profitable again and be able to turn around in at least the next two years.
He said the sale of assets was being made to improve Felda’s cash flow as it had taken a lot of loans from banks.
“So we have to get a bit of cash flow from outside.”
Helping smallholders due to low palm oil price
Felda’s revenue mostly comes from palm oil or debt repayments by settlers.
“We also have standard operating procedures where every settler earning less than RM1,000 is allowed to defer his debt repayment to Felda.
“Whatever social problems encountered by the settlers, we will see how we can help them,” he said.
The price of crude palm oil recently went down to below RM2,000 per tonne due to higher production, following good weather amid a lack of demand.
“We expect global palm oil prices to only recover next year. Until then, we’ll strive to find ways to mitigate the problems soonest,” said Megat Zaharuddin.
On a White Paper on Felda’s strategic rehabilitation plans, he said it would be tabled in the Dewan Rakyat on Dec 10 and the government agency had given all the documents Putrajaya needed.
“We’re discussing it with the economic affairs ministry and they have all the information needed,” he said.
In August, the government said it would be presenting a White Paper to expose Felda’s real situation and chart ways to revive the beleaguered agency founded in 1956.
On the Malaysian Sustainable Palm Oil (MSPO) certification, Megat Zaahruddin said Felda aspired to abide by the rules by getting all of its plantations 100% MSPO-certified next year, from 42% at present.