An agreement with a government guarantee has been signed for the Federal Land Development Authority (Felda) to restructure the agency’s loans through the issuance of sukuk and revolving credit as part of efforts to restore Felda's financial position.
In a statement today, the Finance Ministry (MOF) said that a major part of the restructuring of Felda's loans is to reduce the principal of Felda's debt to financial institutions by RM7.9 billion.
The restructuring will also reduce Felda's financial cost in terms of interest rates and enable Felda to cancel 80 per cent of the RM8.3 billion settlers' debt implemented in 2021, the ministry said.
“This government guarantee is expected to stabilise Felda's financial position and ensure a more sustainable business model so that Felda will continue to be able to promote social mobility for settlers and Felda's new generation," the ministry said.
The government guarantee was signed by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim.
According to the statement, the government has agreed to provide a government guarantee to Felda in 2019 to enable the agency to implement its redevelopment plan under the transformation programme that began in 2020 for a period of five years.
The ministry said the government has improved the management of the distribution of funds to Felda as a state agency by appointing AmanahRaya Trustees as the trustees for account transactions.
"This is to ensure that Felda's transformation plan is on track and that accountability and integrity requirements are met," MOF said.
Source: BERNAMA News Agency