KUALA LUMPUR: Federal Land Development Authority (Felda) is confident of taking FGV Holdings Bhd private by the end of the year, after failing with its previous offer about four months ago.
Felda chairman Datuk Seri Idris Jusoh said it was in talks with certain state governments, which hold a combined nine per cent stake in FGV, over a fresh privatisation attempt.
Felda failed in its bid to privatise FGV at RM1.30 per share in March, falling short of accumulating the minimum 90 per cent stake needed.
At the close of its offer on March 15, Felda only owned nearly 81 per cent of FGV shares.
Under Bursa Malaysia's listing rules, Felda required acceptance from shareholders who collectively hold the balance of 1.63 billion FGV shares to proceed with the privatisation.
This would have translated into a 95 per cent stake or about 3.46 billion shares in the plantation giant.
The Pahang government and Sabah government, via Sawit Kinabalu Sdn Bhd, reportedly remain substantial shareholders of FGV with 5.0 per cent and 4.0 per cent stakes respectively.
At RM1.30 per share, the privatisation offer valued FGV at RM4.74 billion, a 71.4 per cent discount to its 2012 initial public offering price of RM4.55 per share.
It is not immediately known if Felda would potentially raise its offer price.
FGV closed 0.76 per cent or one sen to RM1.31 today, for a market capitalisation of RM4.78 billion.
A successful privatisation would bolster Felda's intention not to terminate the land lease agreement (LLA) with FGV, Idris told a media briefing on Tuesday, ahead of the launch of "Felda Settlers' Day" celebration.
Privatising FGV would also provide Felda with a sustainable income stream, he added.
Felda previously said it would not be prudent to compensate FGV for the takover of 351,000 hectares plus palm oil mills under the LLA since it already had majority control of the company.
Idris said it would use the proceed raised from a multi-billion ringgit bond issuance by Felda to part finance the new privatisation offer.
Prime Minister Tan Sri Muhyiddin Yassin, when launching "Felda Settlers' Day" on Wednesday, announced that the government had approved a RM9.9 billion bond issuance by Felda to pay for FGV's privatisation offer and debt restructuring with its creditors.
The bonds were guaranteed by the government, he added.
The RM9.9 billion bond issuance was first proposed and presented by the special task force chaired by Tan Sri Abdul Wahid Omar at a Cabinet meeting on October 14 last year, according to Minister in the Prime Minister's Department in charge of economy Datuk Seri Mustapa Mohamed late last year.
Felda would also restructure debts owed to financial institutions, Mustapa said at a Felda briefing last October.
Felda's debts stand at a whopping RM10.6 billion.
FGV's intended privatisation means Felda will also enable Felda to hold a direct controlling stake in MSM Malaysia Holdings Bhd, the country's biggest sugar refinery.
Based on today's closing price of RM1.24, FGV's 51 per cent stake in MSM is valued at about RM440 million.