KUALA LUMPUR — Oct. 12, 2017: The Federal Land Development Authority (Felda) is selling its Grand Plaza serviced apartments in London as part of its initiatives to reorganise and restructure its assets to strengthen its financial position.
The decision follows the agency’s move to dispose off assets not related to its core operations.
“I am convinced that the sale of this hotel is in line with Felda’s direction to return to its core business and will have a positive impact on Felda’s finances.
“This will also help Felda to focus on the settlers’ plantation management to ensure that they get a high income while ensuring their welfare and well-being is protected,” Felda chairman Tan Sri Shahrir Abdul Samad said in a statement today.
He was commenting on the claim by Member of Parliament for Pandan, Rafizi Ramli, that Felda would not make a profit from selling the property.
Shahrir said that up to now, 54 parties had expressed interest in buying the property and the sale process is in the final stages.
On Rafizi’s claim of a mysterious operating expense of RM80 million, he said the allegation was baseless, as the main component of the hotel’s administrative expenses was the annual lease payments.
The lease rate is the rental fee that needs to be paid by FIC Grand Plaza Ltd., a company that manages the business on behalf of its parent company Felda Investment Corporation (FIC) UK Properties Sdn. Bhd., Felda’s investment arm.
Shahrir pointed out that Felda is a statutory body with its own income and financial resources without obtaining financing from the federal government since 1996
“This means Felda’s operations are not directly tied up to taxpayers or settlers,” he said, rebutting Rafizi’s allegation that the agency could lose millions from the sale of the property, with the purchase possible through a loan from the Employees Provident Fund.
The property was acquired through the listing of Felda Global Ventures Holdings in 2012 using Felda’s internal funds. The agency did not incur any interest payment costs.
Shahrir said that besides asset restructuring, Felda’s financial restructuring and strengthening measures would result in cost savings and enhancing internal capabilities, getting a federal fund for infrastructure projects in Felda land schemes, as well as restructuring existing loans.
In Melaka, Shahrir said Felda’s assets exceed its liabilities, hence the allegation that it is on the brink of bankruptcy that prompting the decision to sell the London property is uncalled for.
“When we have a surplus we convert it to bank savings or buy fixed assets. So, with fixed assets we sell part of them to solve cash flows, no point keeping a lot of properties and not selling them.”
He said Zakaria and FGV chairman Datuk Azhar Abdul Hamid were able to team up to steer the Felda subsidiary to become a competitive business entity.
Zakaria was given leave of absence in June pending a probe into certain deals under but was recently asked to resume duties after a domestic inquiry cleared his name. — Bernama