Post-listing Felda faces RM1.5 bil annual deficit

Post-listing Felda faces RM1.5 bil annual deficit

National Felda Settlers’ Children Association (ANAK) has warned the possibility of Felda turning into another entity requiring continuous government aid if Felda Global Ventures Holding was listed in accordance with the much-criticised plan.
Revealing to the media a lease agreement between Felda Holdings and FGVH, the group said Felda could see a huge fall in revenues as FGVH would only pay RM251 million in rental and also 15 per cent of profits from its oil palm plantations, which amounts to RM257 million at the projected price of RM2,900 per tonne of oil palm fruits for the 360,067-hectare land mortgaged by Felda Plantations to FGVH.
“Felda’s revenue which is around RM2 to RM 2.3 billion a year, will be left with a mere RM508 million. Even that is subject the price of the commodity remaining stable as it is now,” said ANAK's economic advisor Dr Rosli Yaakob.
Rosli, who served Bank Negara Malaysia as a deputy director, also said that Felda had turned in a profit of only RM400 million in 2010.
“Felda’s expenditure in 2010 exceeded RM1.98 billion. Felda will suffer a deficit of RM1.5 billion. Who will bear this cost?” he asked.
Felda has been self sufficient since the 1990s, having been able to generate its own income.
Meanwhile, ANAK chairman Mazlan Aliman said the lease agreement between FGVH and Felda Holdings was being revealed as many settlers had been kept in the dark over details of the listing.
“If the agreement is signed, everything will fall to FGVH and Felda will lose its role as the institution for the development of Malay land. Felda will be reduced to a mere puppet, with its business deals managed by FGVH without interferences,” he added.
In addition, Mazlan said part of the agreement also made it incumbent upon settlers, who wanted to obtain assets from Felda cooperative Koperasi Permodalan Felda, to sell their palm oil to factories owned by FGVH.
Mazlan said Pakatan Rakyat-controlled states had agreed not to sign any land deal which transfers ownership of lands in these states to the proposed listed company FGVH.
-Harakahdaily

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