Felda Global stake buy on track, no fallout in Eagle High deal

Report time: Razali (middle) shaking hands with a Felda settlers’ representative after presenting the report. Looking on are Emir (left) and Felda management staff members.

KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) has quashed speculation of a fallout in its acquisition of a 37% stake in PT Eagle High Plantations Tbk.

Group president and chief executive officer Datuk Mohd Emir Mavani Abdullah maintained that the due diligence exercise on the Indonesian planter was on track and would likely be concluded by the end of this month.

“So far, 75% of the due diligence report has been completed and we still have a bit more to finish,” he added.

It is believed that FGV will likely hold an EGM as early as September to seek approval from its shareholders and relevant authorities on the FGV-Eagle High deal.

“Once the due diligence is done, we still need to go through the governance process, ie, informing Bursa Malaysia, our board and shareholders.

“As this is an overseas investment, FGV will also need to get the Finance Ministry’s approval before the deal can go through,” Emir told a press conference after the handover ceremony of the Eagle High Visit Report Book to the Felda settlers’ representatives here yesterday.

The ceremony was witnessed by Deputy Minister in the Prime Minister’s Department, Datuk Razali Ibrahim.

FGV had in mid-June proposed to acquire a 37% stake in Eagle High from Rajawali Group, which is controlled by Indonesian business tycoon Tan Sri Peter Sondakh.

Under the terms of the deal, FGV will pay US$632mil cash for a 30% stake and offer 95 million new FGV shares for 7% more in Eagle High, which is equivalent to about US$47mil.

This will result in Rajawali Group owning about 2.6% in FGV once the deal, which needs approval from shareholders, among others, is concluded.

FGV will also acquire a 93.3% to 95% stake in Rajawali’s sugar project for US$67mil cash.

The shares of Eagle High and Rajawali Group’s sugar project will be owned by FGV unit FGV Kalimantan Sdn Bhd.

The FGV-Rajawali partnership, however, is subject to a definitive agreement, due diligence, approval from shareholders and the respective regulatory authorities.

On why the Employees Provident Fund had disposed of a 0.22% stake in FGV, Emir said: “I don’t think FGV can stop any of its shareholders from deciding on what they want to do with their shares. Shareholders have their own strategies on what they want to do with their investments.”