10/10/2011 (The Star) - Felda Global Group has been given the green light by the Government to list its commercial unit, Felda Global Ventures Holdings Sdn Bhd, on Bursa Malaysia by the middle of next year.

Felda Global Group comprise Felda Global Ventures and Felda Holdings Bhd, which are the commercial entities of Federal Land and Development Authority (Felda).

Prime Minister Datuk Seri Najib Tun Razak said in his Budget 2012 speech that the listing was to raise funds to enable the company to be a global conglomerate.

The listing would also create another blue-chip plantation company, besides attracting international investors to the local bourse, he said.

Najib also assured that the rights and interests of about 112,000 Felda settlers would continue to be protected by its cooperative body, Koperasi Permodalan Felda (KPF), as the majority shareholder of Felda Global Ventures.

“Felda settlers are expected to receive a windfall, with the amount to be announced before the listing,” he added.

Felda Global Ventures is a highly-diversified commercial entity focusing on oil palm, sugar, multicrop, logistics and supply chain as well as downstream operations. It is one of the world's largest palm oil producer, contributing about 8% of the world's palm oil production.

In response to Najib's announcement, Felda Global Group president and chief executive officer Datuk Sabri Ahmad said: “In a nutshell, Felda is ready to fulfill the Prime Minister's announcement to have Felda Global Ventures listed on Bursa Malaysia.

“We welcome the challenge of listing Felda Global Ventures by early next year, which is reflective of the success of Felda's own transformation programme.”

Sabri said in statement that Felda had done well in its first 50 years of operation and the Prime Minister had rung the bell for it to take on the challenges over the next 50 years.

“I see the listing of Felda Global Ventures as being an instant boost for Felda settlers where the value unlocked will directly flow down to every single settler through KPF, which is collectively owned by the settlers,” he said.

Felda chairman Tan Sri Mohd Isa Abdul Samad said settlers wanted the successful listing of Felda's sugar unit MSM Malaysia Holdings Bhd on Bursa Malaysia to be emulated.

“The announcement by the Prime Minister to list Felda Global Ventures is timely and the move will see the settlers reaping the profits yet again,” he added.

KPF made a paper gain of RM300mil from the listing of MSM recently.

Isa expects the listing of Felda Global Ventures to drive Felda's transformation towards 2020 that will also ensure the sustainability of Felda generations and improve their livelihood.

Meanwhile, a source close to Felda said the Felda Global Group's approach in listing Felda Global Ventures would follow the three sustainability principles People (for its settlers, which now total about 112,000), Profits (for Felda's financial well being) and Planet (adopting green practices in its day-to-day operations).

For now, the group is still ironing out details for the listing requirements. These include the appointment of local and foreign investment bankers, and the settlers' land management with Felda.

Of Felda's 850,000ha land bank, 500,000ha are owned by settlers and the remainder belongs to Felda Global Group.

“Of importance is that there will be no changes in the land ownership of settlers that are currently managed by Felda Global Group,” the source said, adding that this issue would need to be carefully addressed.

“We are looking at ways to ensure a win-win situation whereby Felda and its settlers, via KPF, can enjoy good profit sharing from the listing exercise.”

Meanwhile, an industry observer suggested that Felda Global Group offer Felda Global Ventures shares to Government institutions like Retirement Fund Inc, Employees Provident Fund and Permodalan Nasional Bhd as well as to the state governments where most Felda schemes are located.

To ensure continued liquidity in Felda Global Ventures post-listing, Felda Global Group can also invite strategic foreign partners with big global presence to take up stakes.

“However, like what the Prime Minister has said, KPF must remain the single-largest stakeholder of Felda Global Ventures. Ideally, the listed entity must at least be 51% controlled by Malaysian parties,” he added.

The industry observer envisaged that the challenge was on how to transform Felda Global Ventures from a mere commercial entity of Felda Global Group into a fully integrated agro-business conglomerate with strong global presence.

Towards this, proceeds from the proposed listing will likely be used to expand land bank for Felda Global Ventures' businesses like oil palm, rubber and sugar plantations.

“Land bank for oil palm and rubber plantation can be sourced in Thailand and Indonesia while that of for sugar can be scouted in Vietnam and Cambodia,” he said.

Replanting programme in Malaysia is also important to ensure continued efficiency for the plantation division of Felda Global Group.

Last year, Felda Global Group's oil palm-related operation contributed about RM1.3bil income to Felda and its settlers.

However, post-listing, Felda Global Group was expected to undertake aggressive replanting activities on Felda land and develop more infrastructure, the source said.