Malaysia: FGV to issue US$1b sukuk

EXPANSION DRIVE: Conglomerate in midst of choosing banks for the exercise, say sources

PLANTATION giant Felda Global Ventures Holdings Bhd (FGV) is considering selling more than US$1 billion (RM3.21 billion) of dollar-denominated exchangeable Islamic bonds (sukuk), said three people with knowledge of the deal.

    According to them, the bonds will be issued later in the year to finance its expansion drive.

    "FGV is in the midst of choosing banks for the potential offer. It wants to raise cash to buy up more companies to support its existing businesses, albeit cautiously," the sources said.

   Part of the proceeds will be used for potential acquisitions of additional landbank in Southeast Asia and Africa  by 2015 for planting oil palm and rubber.

    FGV raised more than RM11 billion by selling shares on the local stock exchange in 2012. Its initial public offering (IPO) was the second-largest in the world, after Facebook,  that year.

     A portion of the IPO exercise's proceeds was used for capital expenditure to increase efficiency as well as extension of capabilities, plantation acquisitions, expansion of downstream activities and other working capital requirements.

    For fiscal year 2013, FGV's net profit surged 21.72 per cent to RM980.99 million despite the tough economic conditions. Revenue for the full year was RM12.6 billion.

     Its cash and near cash as at end-December stood at RM5.02 billion.

    FGV plans to acquire new businesses and increase plantation acreage and crude palm oil (CPO) production to achieve its revenue target of RM100 billion.

    The company manages 853,000ha of plantations in Malaysia and Indonesia.

    Last year, the company produced 3.21 million tonnes of CPO and it plans to increase production to more than four million tonnes.

    President and chief executive officer Mohd Emir Mavani Abdullah told Business Times recently that FGV aims to manage more than one million hectares of plantations.

    He said to be a RM100 billion turnover company, FGV would need to grow by eight times.

(Business Times / 23 May 2014)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com