KUALA LUMPUR, April 10 — Emergency funds for the Federal Land Development Authority (Felda) have taken a critical hit, the economic affairs minister told Parliament today as he highlighted its cash reserves had dwindled to just RM35 million last year.

Datuk Seri Azmin Ali said the state-owned plantation titan’s cash reserves between 2007 and 2011 stood at RM2.5 billion.

“Before the listing of FGV, Felda generated operations revenue via management of commercial land owned by Felda, about 400,000 hectares.

“Between 2007 and 2011, Felda recorded a net profit between RM200 million and RM1.1 billion a year,” Azmin said while tabling a Felda White Paper in the Dewan Rakyat.

Advertisement

In the document, it was revealed that the government will allocate RM6.3 billion to rescue Felda.

The document said that the infusion is needed to manage Felda’s RM14.4 billion in liabilities as the agency has critical cash-flow problems.

The bailout will be channelled via grants, loans and government guarantees.

Advertisement

The White Paper revealed that Felda was expected to delay its RM1.98 billion debt repayment this year, with another RM9.3 billion to be paid periodically in eight years, between 2020 and 2028.

It said that the cash flow issues resulted in the state-owned palm oil agency being unable to cover its operating, replanting and interests, as well as its outstanding payments owed to creditors.

The White Paper also suggested a restructuring of Felda’s companies and investments, advising the GLC to get rid of non-strategic assets and shutter non-active enterprises.