PETALING JAYA: PT Eagle High Plantations Tbk, a unit of Indonesia-based Rajawali Group, has denied taking any legal action against the Federal Land Development Authority’s (Felda) plan to walk back on a US$500mil purchase of a stake in the company, according to a report by Reuters.
“Felda and Rajawali, or any subsidiary of Felda or Rajawali, are not or have never been engaged in any court proceeding,” Reuters quoted Rajawali as saying in a statement yesterday.
The statement came about after a Malaysian official last week said that Eagle High had decided to contest Felda’s decision to walk back on its acquisition of the stake in arbitration.
On April 8, Felda director-general Datuk Othman Omar had lodged a police report at the police commercial crime unit, claiming that the firm was cheated into entering into a “one-sided” deal for the sale and purchase of Eagle High two years ago.
He claimed that the-then Prime Minister-cum-Finance Minister, Datuk Seri Najib Razak, had directed Felda to invest in Eagle High through a 37% stake purchase.
This was revealed in a Finance Ministry letter to Felda dated Dec 8, 2015.
Othman said that the purchase of Eagle High, owned by Indonesian billionaire Tan Sri Peter Sondakh, the head of the Rajawali Group, was done through Felda’s special-purpose vehicle FIC Properties Sdn Bhd.
On April 11, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said that Felda would pursue its efforts to exercise the put option to sell back the 37% equity stake in Eagle High to Rajawali.
Felda, said Mohamed Azmin, had filed a notice to Eagle High last year to exercise the put option to sell back its 37% stake in Eagle High to Rajawali. However, the request, according to him, was rejected.
“This is proof that it does not have the financial capability to pay Felda’s cost of investment in Eagle High,” he said.
In April 2017, Felda completed the purchase of a 37% stake in Eagle High from Rajawali for US$505.4mil, which was reportedly higher than the valuation by two independent appraisers on the company of US$264mil and US$404mil, respectively.
The deal came with a put option that supposedly allows Felda to sell back the stake to Rajawali with an annual 6% gross return.
Did you find this article insightful?