The gong would be hammered to signal the trading for FELDA Global Ventures Holdings Bhd shares at Bursa Malaysia on 28 June. Its the dawn of a new beginning for many reason. It is the largest agriculture-based IPO in the country. It is an IPO which will bring the larger 1.2 million odd warga FELDA to a different level and strategic enough, to ensure that they would be part in better economic position in the next 50 years.
For one, FELDA settlers who have an indefinite benefit from the 37% originally was planned to be allocated for Koperasi Permodalan FELDA (KPF). As they have decided for ‘Plan B’ when KPF decision was delayed, amongst others, because of minority sabotage, then the 37% would now be held by FELDA (Authority). 17% would be held by FELDA (Authority) where else the 20% would be injected into a special purpose vehicle (SPV), designed for long term FELDA settlers’ economic benefit.
Published: Friday June 15, 2012 MYT 8:04:00 PM
Felda settlers to gain lifelong benefits
PORT DICKSON: Felda settlers will gain lifelong benefits from the listing of Felda Global Ventures Holdings Bhd (FGVHB) on Bursa Malaysia on June 28, said Felda chairman Tan Sri Mohd Isa Abdul Samad. He said the settlers would also own 20 percent of FGVHB equity on top of the RM15,000 windfall and 800 units of shares. “If you still remember we keep 37 percent in Koperasi Pengguna Felda (KPF). As KPF cannot have any equity, so we keep 20 per cent in a trust fund and the remaining 17 percent held by Felda. “So 20 percent of the equity will be owned by settlers as long as FGVHB is an ongoing concern without having to invest any capital,” he told reporters after attending the Port Dickson Teachers’ Day celebration here Friday. He said as the settlers would earn dividend from their shares, the bigger the profit, the bigger would be their earning. Isa said Prime Minister Datuk Seri Najib Tun Razak would deliver the second phase of bonus payment of RM5,000 to settlers on the Settlers’ Day in Kuala Lumpur on July 7 to coincide with the opening of Menara Felda. – Bernama
Prime Minister Dato’ Seri Mohd. Najib Tun Razak announced in his 2012 Budget speech on 7 Oct 2011, that for recognition of lifelong service and ‘perjuangan‘ as FELDA settlers, as part of the benefit of FGVH be listed in Bursa Malaysia is the ‘Durian Runtuh’, to be distributed to al 112,635 FELDA settlers. This is achieved because the FGVH listing exercise unlocked the value of consolidated assets for all business entities under the Kumpulan FELDA.
On top of the RM 15,000.00 for each FELDA settlers family ‘Durian Runtuh’ announced by Prime Minister Dato’ Seri Mohd. Najib Tun Razak, part of the direct benefits to the 112,635 settlers are the shares that would be allocated to each of them. It is part of the 2.5% of the consolidated paid up of 3.64 billion shares and is known as the ‘Blue Form’, scheme allocated for FELDA settlers. However, a minority amongst the FELDA settlers and Opposition from outside are making a big fuss out of this. In actual fact, the allocation is actually well received.
Published: Sunday June 17, 2012 MYT 6:55:00 PM
Isa Samad: Most Felda settlers accept offer of 800 units of FGVH sharesBENTONG: The majority of Felda settlers have agreed to accept the offer of 800 units of Felda Global Ventures Holdings (FGVH) shares, Felda chairman Tan Sri Mohd Isa Samad said. He said only a few from a total of 112,635 settlers nationwide had rejected the offer. “The listing of FGVH on the Main Board of Bursa Malaysia is scheduled for June 28. “So far, we have received positive feedback from Felda settlers even though some of them were dissatisfied with the amount of shares offered to them.”The offer of 800 units of shares is apt as they also have another 20 per cent shares in the form of trust fund and annual dividend for life.”So, let’s not fall for the lies spread by certain quarters who are trying to sabotage the listing of FGVH,” he told reporters .Mohd Isa said the settlers were lucky because they were offered the shares even when their land were not involved in the listing. He criticised a handful of Felda settlers who were still supporting the opposition even though the federal government had given them a very special position in the society.”Felda settlers are the most privileged and fortunate to be able to have properties, including land, houses and shares,” he added. – Bernama****************
Isa is not wrong in that deduction. FELDA settlers’ holding in FGVH comes in the bigger picture.
The thing is that, the 112,635 FELDA settlers’ interests would be looked after in the 20%of the FGVH paid up would be injected to the purposely created into the SPV, which at this point of time is believed to be FELDA Asset Holding Corporation (FAHC). If annual profit after tax and minority interests (PATAMI) is at RM 1.2 billion and FGVH’s dividend policy is 50%, then the SPV would earn a net of RM 120 million annually.
That is a repetitive income of RM 1,065.00 per FELDA settler annually, which would be spend for their economic benefits and community. As the revenue expand and PATAMI increase, this fund would also be increased.
This is by far a substantive addendum on the strategic ‘Bumiputra Agenda’, expanded from the ‘unlocking of values’ as a spin off from FGVH listing. Previously, when Amanah Saham Nasional (ASN) scheme first launched in 1981, Federal Government set aside RM 500 million for Permodalan Nasional Bhd (PNB). Today, the value of the ASNB scheme as it has been expanded is valued at RM 71 billion, after thirty one solid years.
It is expected, the post listing market capitalisation of FGVH would be RM 16.8 billion. If 20% of that would be allocated to the SPV created for the economic interest of the 112, 635 FELDA settlers, that is a market value of RM 3.36 billion. That is effectively RM 30,000.00 market value of FGVH held under trust by the SPV, to cover the interest of each FELDA settler.
Undoubtably, the ‘Bumiputra Agenda’ in FGVH is well covered. The IPO allowed 37% being allocated to FELDA settlers via FELDA Authority. FELDA settlers would be allocated 2.5% in the ‘Blue Form’ scheme where else FELDA Authority and FGVH employees and workforce will be allocated 3.0% under the ‘Pink Form’ scheme. On top of that, it is strongly believed that PNB will be allocated 7.5%, various Bumiputra investors and entities (through MITI) 9.5% and several institutions such as Tabung Haji would be allocated 5.0%.
That is effectively 64.5% holding in the name of ‘Bumiputra Agenda’.
If the market capitalisation is valued at RM 16.8 billion, that is almost RM 11 billion in prime blue-chips shares held directly or in trust by various Bumiputra entities. Investment bankers are bullish about FGVH listing and ability to maintain market capitalisation, deemed to be the second largest IPO in the world for 2012 after Facebook.
As some of current FGVH projects and programs mature, the benefits would soon be realised. Some analysts project that FGVH could realise a consolidated revenue of RM 30 billion. If PATAMI is calculated at 12%, it means that distributable dividends stand at the neighborhood of RM 1.8 billion per annum. That should translate a net income of RM 1.1 billion, for the Bumiputra shareholders/stakeholders of FGVH.
The State Governments where FELDA Plantations Bhd have estates would get an aggregate of 12%. It is also believed that strategic pension funds EPF and KWAP would allocated 3.1% each, respectively. These Government agencies’ holdings, coupled with the Bumiputra holdings add up to 80.7%.
Unconfirmed information stated that foreign holdings of FGVH is at the neighbourhood of only 15%, which include strategic investors and some of newly formed strategic partners and alliance of FGVH. Part of FGVH’s business plan is to have value added downstream products in several developed and matures markets.
Detractors of FGVH IPO with the malice intention to instigate FELDA settlers and the Malays at large, should no longer have any more point to rant after this. The holdings of FGVH are very transparent and it has its objectives. In time, like ASNB scheme, benefits from having FGVH group of companies listed and space to grow would trickle down to the pockets of the various stakeholders.
Other positive effect of the FGVH listing which was announced by Prime Minister Dato’ Seri Mohd. Najib Tun Razak during the ‘Meet the FELDA Community’ session in FELDA Jengka 8 on 8 May 2012 is that FELDA would from now help to rebuild and upgrade traditional kampungs around FELDA schemes, as part of the CSR program. Funds would be allocated under Yayasan FELDA for this and non-FELDA rural folks in traditional kampungs would now benefit from monies derived from FGVH business activities.
This program is an addendum to the ‘Bumiputra Agenda’, as part of Prime Minister Najib’s Transformation Program to bring Malaysians to a higher income and economic level, on top of realizing the New Economic Policy (NEP) his late father engineered forty years ago.
It is a very sound and smooth single stroke. to move the nation forward and narrowing the economic gap for the majority, especially the rural Malays.