Felda’s decision to buy a 37% stake in Indonesian planter EHP is likely to have major financial implications for Felda Global Ventures, says report.
KUALA LUMPUR : The Federal Land Development Authority (Felda) plans to issue sukuk to raise 50% of the money needed to pay for its 37% stake acquisition in PT Eagle High Plantations Tbk (EHP).
The other 50% of the acquisition figure of RM2.26 billion will come via a loan from a European bank,
Felda’s subsidiary, FIC Properties Sdn Bhd, is acquiring the stake in EHP. The Rajawali Group of Indonesia is the majority owner in EHP.
“The sukuk issuance could be announced as early as late January. The debt will be serviced by the cash flow generated by Felda Investment Corp’s (FIC) assets,” The Star quoted the source as saying.
As Felda is a government-backed agency, the report says, the sukuk, or Islamic bond, is expected to come with an explicit government guarantee.
Most institutional funds, which are the likeliest to subscribe to the sukuk, only purchase high-rated bonds and a government guarantee will ensure that the bonds are rated at or close to the top investment grade.
Opposition figures have criticised the deal, saying the price was too high and that it would not benefit Felda settlers. Even CIMB Group chairman Nazir Razak had said the price was too expensive.
The purchase price translates to about 580 rupiah (19 sen) per share. Yesterday, EHP’s shares closed at 278 rupiah per share, about 50% below the proposed offer price.
In defending the deal, Felda had said: “The share price may not reflect true value of EHP. The accepted valuation is enterprise value per hectare, which is US$16,000 enterprise value per hectare, which is what Felda paid for the 37% stake.”
It also said the deal would not impact Felda’s existing commitments and programmes to improve the wellbeing of the settlers.
In addition, it said, the deal gave Felda access to a huge landbank in Indonesia.
The Star report said the EHP deal might have major financial implications for Felda Global Ventures (FGV).
For example, it said, the proposed restructuring of a land lease agreement (LLA) between FGV and Felda was unlikely to happen in the foreseeable future, given Felda’s current fundraising needs.
According to the report, the associated costs from the LLA had long been a drag on FGV’s cost of production for its upstream business.
Under the LLA, FGV has to pay Felda a fixed lease amount of RM250 million per year in cash for 20 years and a 15% share of operating profit from the sale of fresh fruit bunches derived from the estate land leased from Felda.
The views expressed in the contents are those of our users and do not necessarily reflect the views of FMT.
lagi info di : Gosip Artis Terkini
Come Clean On Support For Unity Govt, Saravanan To ...
Ketua Pemuda Pas Pahang Dakwa Ahli Parlimen Dap Ra ...
Saic Motor Tayang Mgs5 Ev Dengan 2 Varian Pilihan, ...
Skim Pembiayaan Perumahan Muda (sppm): Syarat Kela ...
Related Post
Tak wajar jawab soalan 1MDB sekarang, kata Najib
Bekas perdana menteri itu berkata, beliau tidak nampak sebarang faedah melibatkan diri dalam wacan- Najib says inappropriate to respond to 1MDB questions now
Former prime minister says he will address the issues at a relevant forum if necessary as investig
- Want to quit smoking? Here’s what ex-smokers have to say
A thread on Reddit titled 'Ex-smokers of Reddit, tell you what ACTUALLY WORKED to get you to succe
- Masih awal untuk nilai impak ekonomi kerajaan PH, kata agensi penarafan
Beliau berkata, pasaran kewangan Malaysia juga ternyata lebih cenderung ke arah penyusutan berikut