Feedlot’s new owner will repay govt loan, says Salleh

PETALING JAYA: The National Feedlot Corporation already has a buyer willing to fully settle the outstanding amount the company owes the federal government, says its chairman, Mohamad Salleh Ismail.

The buyer has agreed to completely settle what is owed by the NFC within three months from an agreement with the federal government to restructure NFC, said Salleh.

“NFC is currently awaiting approval from the government.

“NFC’s new buyer has already agreed to fully bear the liability of NFC’s loan, and to make full redemption of the loan taken from the federal government.

“Prime Minister Tun Dr Mahathir Mohamad was informed of this in a letter dated Nov 21, 2018.

“The buyer has also informed the government of its willingness and confidence in restoring and restructuring NFC, including making full payment of the loan taken from the government,” said Salleh in a statement today.

He was responding to a statement by Finance Minister Lim Guan Eng on Monday (May 20) that the government was seeking full repayment of RM253.6 million in outstanding loans, interest and late payment charges from the NFC.

Salleh said he believed Lim’s statement was in response to a letter dated May 17 that was sent to the finance ministry from NFC’s new buyer, asking about making full redemption of the loan.

On Jan 9, 2008, NFC received a loan facility of RM250,000,000 from the federal government at an interest rate of 2% per annum, with a loan period of 20 years and a grace period of three years, for a project to expand the local beef industry.

The loan was secured by a debenture that was signed alongside the loan agreement on Dec 6, 2007.

However, the project became embroiled in controversy for being poorly managed, as noted in the Auditor-General’s Report 2011.

Salleh said the new buyer and the agriculture and agro-based industry ministry had already held discussions and formulated plans to revive NFC’s project.

“I’m confident that under the leadership of Dr Mahathir, this issue will be settled in the best way possible, where NFC will pay back the outstanding amount it owes the government and this project, which is full of potential, will be revived by the government and the new buyer of NFC,” he said.

In April, Agriculture and Agro-based Industry Minister Salahuddin Ayub revealed that a company had indicated interest in taking over NFC.

He said the acquisition of the NFC project would be finalised soon after taking into account legal implications. There were ongoing talks between the ministry and the companies interested in the project.

“So far, there are two or three companies that are interested, but only one (company) is serious. We will look at the legal implications on the ministry. If it goes smoothly and the company can refund the RM250 million (which is the government’s loan to NFC earlier) to the MOA, why not (approve the takeover)?” he said in April.