HIT BY STAGGERING LOSSES IN FGV UNIT, CASH-STRAPPED FELDA TO SELL ITS PRIZED MAYBANK STAKE

PETALING JAYA – The Federal Land Development Authority (Felda) is seeking to sell about RM280mil worth of shares in Malayan Banking Bhd (Maybank), paring down its stake in the nation’s biggest bank, weeks after the government agency said it would acquire a substantial stake in an Indonesian planter.

According to The Wall Street Journal, quoting a term sheet, Felda is offering its Maybank shares at a price range of between RM8 and RM8.05 each. It said CIMB Investment Bank is the sole book-runner of the deal.

Felda wasn’t immediately available for comment. The agency’s chairman Tan Sri Shahrir Abdul Samad (pic) will be calling for a press conference today.

In Maybank’s 2015 annual report, it showed that Felda owned 1.9% or 185.15 million shares in the country’s biggest banking group by assets.

At yesterday’s close of RM8.05 a share, Felda’s total stake in Maybank is worth RM1.49bil.

Felda said last month that it planned to acquire a 37% stake in Indonesian palm oil company Eagle High Plantations Tbk (EHP) for US$505.4mil (RM2.25bil) from the Rajawali Group.

The Rajawali Group is led by Indonesian billionaire Tan Sri Peter Sondakh.

The deal has been close to two years in the making and was initially between EHP and Felda Global Ventures Holdings Bhd (FGV).

Felda’s planned acquisition of the loss-making EHP raised questions over its potential benefits to the Felda group.

The purchase price, which translates to 576 rupiah per share, is considered a pricey deal compared with EHP’s share price in the open market.

Yesterday, EHP’s shares closed at 278 rupiah per share, about 48% below the proposed offer price.

In a Dec 25 statement, Felda defended the deal, saying that the offer price was justified by EHP’s massive land bank and potential collaboration and cross-selling opportunities in Indonesia.

FGV said it had signed the termination agreement with Rajawali Group on Dec 23, 2016, and that “the matter has been effectively concluded”.

To finance the EHP deal, Felda said in a Jan 2 statement that it had secured government financing for the deal.

It added that Felda would also consider all funding alternatives available to it, and its priority was to put in place an optimal structure which minimises cost and risks.

– ANN