Felda plans to end ties with Indonesia’s Rajawali

Little progress: Felda executives note that Rajawali has made little progress in securing the RSPO certification, leaving it with little choice but to walk away from the deal.

PETALING JAYA: The Federal Land Development Authority (Felda) is proposing to walk away from its partnership with the Jakarta-based Rajawali Group and demand the return of more than US$500mil it had ploughed into a clutch of oil palm estate and sugar-related manufacturing assets in Indonesia in May 2017.

Felda’s controversial acquisition of a 37% interest in Rajawali’s Eagle High Plantations Tbk came with a so-called “put option” that provided for the Malaysian concern to sell back the equity interest at the purchase price of US$505.4mil, together with an annual interest charge of 6% that must be borne by the Indonesians, according to Singapore’s The Straits Times.