FELDA would need to repay a minimum of RM3 billion to Felda Global Ventures Bhd (FGV) and to provide 11-month notice, following its decision to end the leasing arrangement with the plantation arm and the return of its landbank, reports said.

FGV president and group chief executive Zakaria Arshad said talks were ongoing to unravel the land lease agreement (LLA) with the goal of finding a win-win solution for Felda, FGV and other stakeholders.

Felda is reportedly open to ideas to unravelling the LLA and seeking the return of the land leased out to and managed by FGV to extract higher returns. Felda has a 34% stake in FGV and the latter manages around 335,000ha out of Felda’s total landbank of 850,000ha.

“Both parties are not fighting but complementing each other. Therefore, it is in their interest to find a solution that is best for both,” Zakaria was quoted as saying.

He said if the compensation figure was too high, it might also affect Felda’s cashflow.

As for details on the possible emergence of new shareholders in FGV following a major reshuffle by Felda, Zakaria declined to comment.

Speculation is rife that Indonesian businessmen, Peter Sondakh, who controls PT Eagle High Plantations Tbk, and Martua Sitorus, the co-founder of Wilmar International Ltd, would be the new shareholders via an injection of assets into the group in return for shares and management control. – May 4, 2017.