KUALA LUMPUR: The Federal Land Development Authority (Felda), via wholly-owned FIC Properties Sdn Bhd (FICP), has issued a notice to PT Rajawali Capital International (RCI) and PT Rajawali Corpora (RC) to exercise its put option regarding its investment in PT Eagle High Plantation Tbk.
FICP in December 2016 acquired a 37 per cent stake in Eagle High from RCI for US$505.4 million.
The put option required RCI to buy back the stake for the same price.
Felda said in accordance with the acquisition agreement, FICP can exercise a put option for its investment in two scenarios.
Firstly, upon default by RCI or RC, and secondly, at the sole and absolute discretion of FICP by the option end date, which falls on May 11 this year.
Felda said FICP's exercise of the put option today under the second scenario was to fully safeguard its rights and interests.
"By this put option, RCI or RC must buy back the 37 per cent shares from FICP at the investment price of US$505.4 million, with interest of six per cent per annum from May 11, 2017 to the date of full payment," it said.
Felda said it was confident that the exercise of the put option by FICP was a prudent business decision driven by sound corporate governance principles.
"The decision also serves as one of the initiatives to establish a leaner and more sustainable business model for the Felda Group," it said.