PETALING JAYA: The Federal Land Development Authority (Felda) has signed an agreement involving a government guarantee to restructure the agency's loan.
Prime Minister Datuk Seri Anwar Ibrahim, who is also Finance Minister, said it involved the issuance of sukuk and revolving credit to restore Felda's financial position.
"This government guarantee is expected to stabilise Felda's financial position as well as ensure a more sustainable business model so that it continues to be able to lift the social mobility of settlers and the new generation of Felda," he said in a statement on Wednesday (June 28).
Anwar explained that a large portion of Felda's loan restructuring would involve reducing its principal debt with financial institutions by RM7.9bil.
He said it will also reduce Felda's financial cost in relation to the interest rate charged and enable Felda to abolish 80% of settlers' debt amounting to RM8.3bil implemented in 2021.
"The government has improved governance of distribution of funds to Felda as a statutory agency by appointing Amanah Raya Trustees to ensure that Felda's transformation plan is on the right track and meets the requirements of accountability and integrity.
"The government agreed to give a government guarantee to Felda in 2019 to enable the agency to implement its recovery plan under the Felda transformation programme which started in 2020 for a period of five years," he explained.