Malaysia's Felda to issue sukuk, revolving credit under debt restructuring plan

THE Malaysian government has agreed to restructure the debts of state palm oil plantation agency Felda through the issuance of sukuk and revolving credit, the Finance Ministry said on Wednesday (Jun 28).

Prime Minister Anwar Ibrahim, who is also the finance minister, has signed an agreement involving a government guarantee to Felda on the restructuring plan aimed at restoring the agency’s finances, the ministry said in a statement.

A large part of the restructuring plans will involve reducing Felda’s debt principal of RM7.9 billion (S$2.3 billion) with financial institutions, it said.

The plan will help reduce Felda’s costs against interest rates imposed and allow the agency to write off 80 per cent of loans to farmers amounting to RM8.3 billion.

Felda was set up to help palm oil farmers who work for the agency. It has a stake in FGV, the world’s largest crude palm oil producer. REUTERS