KUALA LUMPUR: FGV Holdings Bhd wants to discuss the terms of the land lease agreement (LLA) with Felda, especially the fixed lease payment over 99 years, irrespective the price of crude palm oil (CPO).
FGV said on Friday “this (LLA) matter has been raised repeatedly over the last three years, causing much uncertainty and concern for our shareholders”.
Under the LLA's current terms, FGV must pay a fixed lease payment of about RM250mil per year for 99 years, starting from 2012. FGV was listed in 2012.
The RM250mil is paid irrespective of prevailing CPO prices. In 2012, when the LLA was negotiated, average CPO price was RM2,843 per tonne. CPO price on April 10, 2019 was RM2,047.
Additionally, FGV has committed to pay Felda a 15% share of estate operating profits. Since 2012, it has paid cumulative of RM2.23bil.
“FGV has met all its obligations under the LLA. As a listed company, FGV would also be required to seek the approval of its shareholders for any proposed amendments to the LLA,” it said.
FGV said that under its new management, it was focused on its groupwide transformation plan which has started to show results.
FGV said it would announcing its Q1, 2019 financial results in May 2019 and it was is positive that all the measures implemented since October 2018 would set the company on a path for sustainable growth.