Settlers' cost of FGV shares halved, windfall for 77,934 investors

As part of a package of incentives amounting close to RM1.6bil, some 77,934 Felda settlers, who are still paying for loans taken to subscribe for FGV shares during the listing exercise in 2012, will see their amounts outstanding being reduced significantly in a scheme whereby Felda matches their liabilities ringgit-for-ringgit, said an official close to the details.

PETALING JAYA: Settlers’ cost of Felda Global Ventures Holdings Bhd (FGV) shares will be reduced by half following the latest set of measures announced by the Federal Land Development Authority (Felda).

As part of a package of incentives amounting close to RM1.6bil, some 77,934 Felda settlers, who are still paying for loans taken to subscribe for FGV shares during the listing exercise in 2012, will see their amounts outstanding being reduced significantly in a scheme whereby Felda matches their liabilities ringgit-for-ringgit, said an official close to the details.

During the listing in 2012, each eligible Felda settler was entitled to 800 FGV shares at RM4.55 per share. The amount came up to RM3,640.

So far, 1,626 settlers have paid off their loans taken for the FGV shares. This group will receive a cash payment of RM1,820, which is 50% of the amount they had forked out.

The other settlers still have a portion of loans not paid.

Assuming a settler has some RM3,000 outstanding of the RM3,640 loan taken for the 800 FGV shares, the settler has to continue repaying until the amount reduces to RM1,820, which is 50% of the total loan.

“Felda will bear the cost of the remaining 50% (of RM3,640), which is RM1,820. The settler will have 800 shares,” said a source.

During FGV’s listing, the shares were mostly financed by commercial banks. However, soon after the listing, Felda decided to assume all the loans from the commercial banks.

In return, the settlers were only required to pay RM50 per month to Felda as part of their FGV shares loan repayment.

Sources said that the latest scheme would result in Felda writing off 50% of the loans that the settlers had taken to subscribe for the FGV shares.

The total liabilities that Felda initially assumed arising from loans taken by settlers to subscribe for FGV shares stood at RM358mil.

Since then, some of the settlers had repaid their loans to the sum of RM158mil as of April 2017, which left the balance to be settled at about RM230mil.

On Sunday, Prime Minister Datuk Seri Najib Tun Razak announced a RM1.6bil windfall for Felda settlers nationwide.

It comprised of six incentives in the form of debt disposals, incentive payments, the setting-up of a special fund and grant, as well as a housing incentive, among others.

The incentives included a special payment of RM5,000 to 94,956 eligible families of Felda settlers, and matching ringgit-for-ringgit the loan taken by some 77,934 settlers for FGV shares.

Other incentives included waiving settlers’ replanting debts at RM5,000 per settler.