FELDA is likely to end the leasing arrangement with its plantation arm, Felda Global Ventures (FGV), and seek the return of its landbank, reports said today.

The move is spearheaded by new Felda chairman Shahrir Abdul Samad, who is trying to extract higher returns from its assets, including the plantation landbank leased out to FGV, The Star said.

With this, FGV will likely have a new shareholder, which the English daily said, would be an investment vehicle led by Wilmar International Ltd co-founder Martua Sitorus.

Shahrir had said Felda needed up to RM3 billion annually to carry out its programmes for settlers and was reportedly unhappy with the returns from the land managed by FGV.

About 335,000ha from Felda’s total landbank of 850,000ha are leased to FGV. The latter will be entitled to compensation if Felda terminates its rights to manage the landbank under the current agreement.

The lease agreement includes a fixed lease payment of RM250 million to Felda annually, as well as a 15% share of FGV’s annual profits derived from the landbank. The lease, signed in 2012, is valid for 99 years.

Among Felda’s plans is the building of new housing for the second-generation of settlers and staff quarters, which is estimated at RM500 million annually. – April 29, 2017.