Stocks in other companies also to be sold; to also exit London hotel business
KUALA LUMPUR — January 17, 2017: The Federal Land Development Authority (Felda) will undertake an aggressive asset disposal exercise this year, both locally and overseas, in a bid to stabilise its cashflow, fund other activities and recover problematic assets under Felda Investment Corporation Sdn. Bhd. (FIC).
Newly-appointed chairman Tan Sri Shahrir Abdul Samad said the exercise will include the sale of its 35 million shares in Malayan Banking worth about RM280 million.
Felda also plans to dispose of its stakes in other trustee stocks to raise a certain amount of proceeds that had been mandated to him by the board of directors at its meeting last November.
Since 1996, Felda has been independent from government funding.
“After 18 years, there are deficits in our cashflow and reserves as some of the investments do not provide us the cashflow that is expected.
“That is why we have to realise back the assets into its potential value so that we can bring back Felda’s financial situation in balance,” he told press conference today.
Among others, Felda intends to sell its hotel in London which is likely to be valued at between RM500 million and RM1 billion.
The returns on investment the hotel business in London does not justify Felda remaining in the industry, explained Shahrir, adding that the asset is going to be sold as it has appreciated in value.
“Why not (sell it)? The price is right. It appreciated very well. The pound is reasonable. So we will make profit on it,” he remarked.
On Felda’s long awaited annual 2015 financial report, Shahrir said it is currently being audited and will probably be tabled in Parliament in March.
Commenting on the delay, he said unlike other business organisations, Felda is an investment holding company which has a different accounting process, especially in recognising gains and losses during a particular period.
Asked on the future plan for Felda Global Ventures Holdings (FGV), Shahrir said it would be determined in the next six months.
“If you want to make a major investment decision such as taking FGV private, it’s going to cost money. It will require deliberation by the board and I can’t make that decision alone,” he said.
On FIC, he attributed the weak governance to the problematic assets under
“If you look at AG’s (auditor-general) report, you can count how much money is involved in all those problematic investments… We actually have spent a lot of money with no returns.”
New members of FIC board will be appointed next week. — Bernama