Felda commercial arm to list? It will create world’s largest listed plantation firm

PETALING JAYA: The market is abuzz with a rumour that Felda Group's commercial entity will seek listing on Bursa Malaysia, a move that could potentially create the world's largest listed plantation company.

Felda Global Ventures Holdings Sdn Bhd and Felda Holdings Bhd which are collectively known as Felda Global Group are cash-generating units of the Federal Land and Development Authority (Felda).

The Felda Group has a staggering plantation size of 850,000ha.

Its closest rival is Sime Darby Bhd with a plantation land bank totalling 647,373ha in Malaysia and Indonesia (excluding its recent 63-year concession to develop 220,00ha in Liberia, West Africa for palm oil and rubber plantations).

In terms of annual crude palm oil (CPO) production, Felda produces about 3 million tonnes while Sime Darby manages 2.4 million tonnes.

Collectively, both companies account for about 12% of the world's total CPO production every year.

An industry source said the potential listing could be any one of the major commercial bodies, namely Felda Global Ventures or Felda Holdings, or both.

Felda Holdings had previously been identified for a listing but it never materialised.

He pointed out that the successful listing of Felda Group's sugar unit MSM Malaysia Holdings Bhd in June could be spurring Felda to list its main commercial assets.

Felda Global Group president and chief executive officer Datuk Sabri Ahmad said recently that Koperasi Permodalan Felda (KPF), which is owned mostly by the settlers, had made a paper gain of RM300mil from the MSM IPO from its 20% stake in the latter.

Felda Group had bought the sugar company only two years ago at a price of RM1.22bil from billionaire Robert Kuok. MSM was listed in June at a valuation of RM2.4bil, which has now increased to RM3.5bil due to the strong performance of its shares.

In order to ensure that any listing of Felda assets benefits its huge number of settlers, an industry source said he envisaged that KPF which has about 136,000 members (112,000 settlers and their families, and the remaining Felda staff) would likely be given a more prominent stake in the entity to be listed.

Having said that, a fund manager pointed out that a listing of a company, for example Felda Holdings, should have sufficient number of shares placed out so as to have a sufficient free float.

“To avoid it from becoming an illiquid stock, Felda should also consider offering shares to government and private and foreign funds, among others,” he added.

Even Prime Minister Datuk Seri Najib Tun Razak at a Felda Global event recently said that he expected Felda Group to be on the lookout for more value-added partnerships and collaboration opportunities.

An industry observer said that a listing of Felda Holdings or Felda Global would bode well for the group as it would become more transparent in its workings and possibly enjoy a better perception. “A listing is also a positive step if Felda hopes to enter into the level of world class agro-based multinational corporations,” he said.

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