KUALA LUMPUR, April 13 — Tycoon Tan Sri Syed Mokhtar Al-Bukhary could sell his sugar refineries to Felda for a possible RM1.2 billion in a move that would create a monopoly on the essential good, The Edge reported today citing sources.
According to the business weekly, the magnate has seen out feelers for the diversified group’s interest in acquiring Central Sugars Refinery (CSR) and Gula Padang Terap (GPT) currently within the stable of his Tradewinds holding company.
“He has begun making overtures to the Felda group ... those high up in the hierarchy are already aware of his plans,” an anonymous source said in the report.
GPT and CSR are increasingly lucrative, with the profits in the former rising from RM8.3 million to RM44 in 2012, while the latter has seen this nearly triple from RM53 million to RM144 million in the same period.
But the returns are only a drop in the RM28 billion in debt that Syed Mokhtar is reported to have amassed and is looking to clear off.
Officials from Felda Global Venture Holdings have denied the speculation in the same report, saying that neither the holding firm nor any of its subsidiaries are considering a takeover of GPT and CSR “at this juncture in time”.
FGVH owns a 51-per cent stake in MSM Malaysia, the country’s largest sugar refinery that was purchased from sugar baron Tan Sri Robert Kuok in 2009 for RM1.3 billion.
The Edge today extrapolated the value of both GPT and CSR as possibly as much as RM1.2 billion using a 12 to 13 times price-to-earnings ratio.
Sugar was a subsidised item until October last year, when the government completely removed price control for the essential item when tabling Budget 2014.
Syed Mokhtar is regularly viewed as the poster boy of the pro-Bumiputera affirmative action policies that were put in place by the now-defunct New Economic Policy (NEP) introduced after the 1969 race riots.
The tycoon is prominently involved in a wide range of industries, leading critics to accuse the government of aiding his domination of the private sector.
Aside from sugar, Syed Mokhtar also holds the local monopoly on rice through PadiBeras Nasional Bhd (Bernas), which he just took private last month.
He also controls POS Malaysia, DRB-Hicom that owns national carmaker Proton, various ports across the country via MMC Corp, and the country’s largest independent power producer Malakoff Corp.
A joint venture between his MMC and Gamuda is also the main developer of the Mass Rapid Transit project, the biggest infrastructure undertaking in the country’s history.
