KUALA LUMPUR: The government will provide a guarantee for the Federal Land Development Authority (Felda) to issue up to RM9.9 billion sukuk, the Finance Ministry said.
In a statement today, the ministry said starting in 2023, the government will allocate up to RM1 billion annually for the redemption of Felda sukuk.
The sukuk, among other things, will finance the settlement of Felda settlers' debts.
"The unity government is committed to ensuring the implementation of the Felda recovery plan, including the disposal of settlers' debts as previously announced, with further actions being taken to enhance its execution," the ministry said.
Last month, Putrajaya signed an agreement to provide a government guarantee to Felda for its debt restructuring exercise, through the issuance of sukuk and revolving credit.
The ministry said a major part of the restructuring of Felda's loans was to reduce the principal of Felda's debt to financial institutions by RM7.9 billion.
The restructuring will also reduce Felda's financial cost in terms of interest rates and enable Felda to cancel 80 per cent of the RM8.3 billion settlers' debt implemented in 2021.