If Felda decides to terminate the LLA — which the White Paper on Felda tabled in Malaysia’s Parliament on April 10 revealed has been detrimental to the government agency — then it would have to compensate FGV in accordance with agreement’s terms and conditions, says Ng.
SINGAPORE (Apr 15): The Federal Land Development Authority’s planned review of its 99-year land lease agreement (LLA) with FGV Holdings is not expected to work out well for FGV, which is heavily reliant on Felda’s resources.
“It will be negative to FGV’s earnings, should Felda amend the terms in the existing LLA and require FGV to pay a higher lease for the land. But, at this juncture, it is unclear if Felda can amend the terms of the LLA easily,” regional head of plantations research at CIMB Investment Bank Ivy Ng tells The Edge Financial Daily when contacted.
