Monday, October 7, 2013

FGV - raise its stake in Felda Holdings Bhd

FGV is in talks to optimise and possibly raise its 49% stake in Felda Holdings Bhd (FHB), the world’s No. 1 crude palm oil (CPO) producer by volume.

The shareholding structure may be reorganised. Some of the assets are better off with FGV.

Unlike the integrated players, it extracts the palm oil and it goes to FHB for refining. Operationally, FGV and FHB are seamless.

FGV could see significant gains from a controlling stake in downstream-focused FHB, which controls 6% of global CPO production and 18% domestically. If it pans out, such a move would render FHB a subsidiary of FGV instead of an associate currently, allowing the plantation giant to consolidate FHB’s revenue and earnings.

FGV has RM2.6bil left in its coffers following the Pontian exercise, which it will deploy to buy land for greenfield and brownfield rubber and palm oil plantations in Myanmar, Cambodia and even Africa.

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