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KUALA LUMPUR: Recovery measures by the Federal Land Development Authority (Felda) are expected to produce positive results in 2023, said the Prime Minister’s Department (Economy) Minister Datuk Seri Mustapa Mohamed.
Measures include the establishment of a working group to monitor the implementation and effectiveness of Felda’s recovery plan to ensure that the agency achieves established key performance indicators, he said.
The working group chaired by Tan Sri Abdul Wahid Omar will strictly monitor the measures so that they are implemented more effectively and smoothly, Mustapa said.
“This will ensure that Felda will have the same success as other large plantation operators and will be on a stronger basis to fulfill its responsibility as an agency that defends the well-being of more than 100,000 settler families without depending on the government,” said the minister in the Dewan Rakyat today.
I was responding to a query from Datuk Ahmad Nazlan Idris (BN-Jerantut) who wanted to know the government’s plan to solve Felda’s cash flow and corporate debt problems.
“Let’s move forward to further strengthen Felda,” Mustapa said.
He said that Felda’s recovery would not be complete simply through government action.
Hence, he said, Felda has been entrusted with strengthening his management.
“In this sense, the Felda administration has developed the New Felda Model based on better governance, better plantation operations, well-being of the settlers, education, research and development and use of technology, in addition to ensuring that Felda is more independent. and sustainable, ”he said.
According to Mustapa, Felda has faced financial problems since 2013 with his profit before taxes deteriorating.
Among the reasons are the listing of FGV Holdings (formerly known as Felda Global Ventures) in 2012 when Felda lost a major source of income, as well as weak palm prices.
To smooth out his day-to-day operations and his commitment to service to the settlers, Felda had to borrow; and its debts now amount to 10.7 billion ringgit.
In September this year, Felda informed the government that it was unable to pay some of its debts and faced liquidity problems totaling 1.3 billion ringgit.
“As a result, the government agreed to give Felda a two-year moratorium on one of its debts and another institution gave Felda a six-month moratorium,” he said.
Mustapa said the settlers’ high debts and low debt collection rate exacerbated the situation and hurt Felda’s financial position.
“To ensure that Felda achieves financial strength and sustainability, the Cabinet approved Felda’s recovery plan on October 14,” he said.
Among the approved proposals was the issuance of a government-guaranteed sukuk worth RM9.9 billion, of which RM6 billion would be used to reduce Felda’s debt burden and the remainder to boost its core income through the acquisition of FGV shares and the termination of the land lease agreement.-Called
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